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Morrison Continues To Press For Aus CIT Cut

by Mary Swire,, Hong Kong

03 November 2017

Australia risks being "marooned" on its own "tax island" if it fails to cut its company tax rate, Treasurer Scott Morrison has said.

In an address to the Australian British Chamber of Commerce, Morrison warned that Australia's "high corporate tax rate is quickly becoming an outlier in a global economy that is shifting to a low-tax environment." He said that low corporate tax rates are "the new normal among the advanced economies looking for a competitive edge."

Morrison stressed that Australia risks being left behind. He pointed out that the UK has reduced its rate from 30 percent to 19 percent over the past decade, and intends to reduce it still further over the coming years. He noted that the new French and US administrations also want to cut their rates, to 25 percent and 20 percent, respectively.

According to Morrison, "The growing gap between our corporate tax rate and those of some of our trading partners is an obvious barrier for new investment. And it is steadily leaving our businesses uncompetitive, which is a handbrake on economic growth and a constraint on further job creation."

If it fails to keep up, Australia will be "marooned on [its] own tax island," he said.

Earlier this year, the Government passed legislation to lower the small business company tax rate to 27.5 percent, and to increase the maximum turnover threshold applicable to those accessing the rate. However, it was unable to carry legislation to reduce the rate to 25 percent for all firms, and has re-introduced its proposals to Parliament.

Morrison said that this rate cut must now be extended to all businesses, "to free them from the shackles of high tax and allow them to grow their businesses, and deliver more and better paid jobs for Australians."

TAGS: tax | investment | small business | business | corporation tax | Australia | United Kingdom | tax thresholds | legislation | tax rates | France | United States | tax reform

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