Australian Government Unveils New Business Tax Rules

by Mary Swire, Tax-News.com, Hong Kong

08 February 2002

New consolidated tax rules designed to streamline the Australian corporate tax system were unveiled on Thursday by Revenue Minister and Assistant Treasurer, Helen Coonan.

The proposed legislative changes will allow groups of companies to be taxed as a single entity, which will mean that businesses could find it harder to use losses to reduce their tax bill, but could save Australian companies millions of dollars per year in compliance costs.

The new rules were originally scheduled for launch in July 2001, but following the introduction of the controversial Goods and Services Tax (GST), the government felt that the country's business sector was suffering from 'reform fatigue', and postponed the launch. The proposed consolidation tax regime is now set to debut this July, following a period of consultation.

Eager to promote the government's new 'user-friendly' image, the Assistant Treasurer promised that companies will have more of a say in fine-tuning the proceedings than they did during the introduction of the GST. The draft legislation will initially be displayed at a Melbourne expo in May, and there will then follow a series of workshops across the country.

'It's quite a radical departure from what has previously been the case where the Tax Office and the government has all the answers and you give the poor old taxpayer the legislation and you say "you work it out" ', Senator Coonan observed during a radio interview. She also revealed that if the initiative is successful, the ATO may use a similar framework to consult business on proposed tax changes.

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