Treasurer signals major tax reform is coming
The Federal Treasurer Joe Hockey has released Re:think, a 196-page positioning paper to open national dialogue on Australia’s future tax system and shape a clear change prior to the next election.
As a positioning paper, it raises more questions than answers but identifies reform is critical to “future proof” Australians quality of life. The Treasurer also points to the digital economy and globalisation as the driving forces for change and warned the current reliance on income tax streams is “unsustainable”.
The paper does not prescribe policy but reading between the lines, there are a number of changes that the Government may be considering as part of the tax reform menu.
Potential changes include:
- Increase the GST
- Increase the Medicare levy
- Index income tax rates
- Reduce company tax to ignite investment
- Reduce tax for small business (we anticipate concessions in the 15/16 Budget)
- Equalise the way savings and investments are taxed including superannuation
- Equalise how different entity structures are taxed e.g. Trusts
- ‘Cash out’ the ability to claim work related deductions with an income tax cut
- Restructuring of the FBT system and removal or reduction of more concessions including for not for profits
- Potential restructuring of the imputation system
- Restructure taxes on alcohol
- Greater focus on tax benefits received by non-resident individuals, business and investors – where the tax benefit has no investment incentive trade off.
The Abbott government has requested input from businesses and the general public to help shape formal policy plans in 2016. PKF Australia will be preparing a submission and welcome your thoughts to assist us in representing client views.
To access the document please visit http://bettertax.gov.au/
Concerned about the future implications for you and your business? contact any of our PKF Adviser's from around Australia