President Arthur Athanasiou, CTA, said it would be a national shame if the government didn’t unveil significant plans to reform the tax system.
We would like to a see a tax system which is fair, simple, efficient and sustainable. Currently, the debate around the system has stagnated despite the government committing to a holistic tax reform.
Though not optimistic about any significant structural tax initiatives in the Budget, we believe that the government should shift the country’s dependence on income tax to a more simple and efficient consumption tax.
“The government must determine the appropriate tax mix for Australia to provide sustainable revenue to meet future government spending promises” Mr Athanasiou said.
We believe the 2016 Budget priorities should include:
- reducing company tax to 25%;
- abolishing the ‘10% rule’ limiting superannuation contributions to self-employed Australians;
- reforming superannuation laws that benefit the small wealthy minority that see superannuation as a wealth and estate planning vehicle rather than providing reasonable benefits for retirees;
- continuing deregulation initiatives and publishing regulation impact statements for each reform;
- concentrating on internationally co-ordinated efforts to address base erosion and profit shifting (BEPS) rather than introducing new Budget measures on multinational taxation; and
- increasing digital resources at the Australian Taxation Office to improve inefficient systems.
Mr Athanasiou also suggests that the government must commit to reviewing issues surrounding individual tax, superannuation, general business and small business tax, not-for-profit sector tax, GST, state taxes, and the complexity, administration and governance of the tax system.
“Shifting from the current heavy dependence on individual and corporate income tax towards more efficient consumption taxes will create a simpler tax system to implement and regulate while providing the government with more sustainable revenue collections.”
Whatever the Budget does contain in terms of tax measures, members of The Tax Institute will be the first to hear what they mean for practitioners and for their clients in our Federal Budget edition of TaxVine, delivered direct to members’ inboxes on Budget night.