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ACCI Urges Aus Parliament To Pass Company Tax Cuts

by Mary Swire,, Hong Kong

24 March 2017

The Australian Chamber of Commerce and Industry (ACCI) has called on Parliament to pass the Government's company tax cuts in full, and not just the small business portion of the proposals.

CEO James Pearson said: "We encourage all MPs and Senators to consider the benefits that will flow to their communities through the reduction in company tax, including increased investment, the creation of new jobs, improved wages, and increased consumption."

"Tax cuts for small businesses are welcome, and the proposed tax cuts for larger businesses in future years will encourage investors to put their money into Australian companies, helping those businesses grow. This is why we urge the Parliament to pass the plan in full."

Pearson also said that the proposals will improve living standards and that if they are implemented only in part, households will receive less benefit. He added that Australia's economic competitiveness will be at risk if it does not reduce its company tax, especially as other countries reduce their tax rates.

The Enterprise Tax Plan Bill was read for a first time by the House of Representatives in September 2016. There have been two second reading debates, on February 9 and March 2, 2017, but the bill has yet to pass this legislative stage. On March 20, Treasurer Scott Morrison said that the proposals would be put to Parliament again over the next two weeks.

The Enterprise Tax Plan comprises two parts. The first phase, a cut to the small business company tax rate from 28.5 percent to 27.5 percent and a three percent increase to the unincorporated tax discount, had originally been earmarked for July 2016. As part of phase two, the Government intends to increase the turnover for the 27.5 percent rate each year until 2023-24, before reducing the rate to 25 percent for all businesses in 2026-27.

According to Pearson, this 10-year timescale for the plan "means that it can be achieved alongside the important task of returning the budget to surplus through containing spending and lifting economic growth."

TAGS: tax | investment | small business | business | commerce | budget | corporation tax | Australia | tax thresholds | tax rates | tax reform | chamber of commerce

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