Please enter your email address to receive a password reminder.
Log into Tax-News+
The OECD has recommended that Australia rebalance its tax mix and make greater use of efficient tax bases such as the goods and services tax.
In its latest Economic Survey for the country, the OECD observed that Australia's tax mix "remains tilted towards direct taxes, especially on corporates, that can hurt growth." It said that the tax mix should be changed to better support economic growth.
The OECD argued that replacing inefficient state level taxes with a higher GST and making greater use of the land tax would boost the economy. It noted that, at 10 percent, Australia's GST rate is comparatively low – below the 2016 OECD average of 19.2 percent.
The report noted that any changes to the GST system would require some "reshaping of federal-state financial arrangements," as GST revenues are currently passed to the states. It added that, "to the extent the Australian GST is less progressive compared to the personal-income taxes, reform would also need to address poverty and income distribution issues, perhaps by adjusting welfare policies."
The OECD also recommended that the government make the Research and Development (R&D) Tax Incentive more effective, for instance by combining an eligibility threshold with an increase in the expenditure cap.
IMPORTANT NOTICE: Wolters Kluwer TAA Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
All rights reserved. © 2017 Wolters Kluwer