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Global SME tax policy conundrum


There is a real mystery surrounding why so much time seems to be spent by governments around the world on providing small businesses with tax concessions, without seemingly fully understanding, or properly explaining, to their constituents how such tax initiatives fit within their wider tax policy framework. This article examines Australia’s small to medium sized enterprises (SME) tax policy vis-à-vis those of other developed countries, and concludes that Australia has never really had a formal, well defined, articulated tax policy on how it deals with small businesses vis-à-vis small to medium sized businesses and larger businesses. In Australia, this lack of policy direction has resulted in tax initiatives in the SME sector being introduced in an ad hoc and reactive fashion, and has contributed to policy makers failing to properly identify and target relevant tax concessions in this sector. Interestingly, it is concluded that Australia is not alone and that other governments around the world have also struggled to come to grips with setting appropriate tax policies in relation to SMEs with political expediency and bandaid solutions being the only two real constants in the quest for SME tax policy direction.

Author profile

Dr Mark Pizzacalla CTA
Mark is Partner-in-Charge of the Private Clients practice at BDO Melbourne as well as being integrally involved in the firm's Tax and Advisory practice. Mark's focus is on both strategic tax advisory and tax compliance as they relate to the private client sector. Mark is a regular speaker on taxation issues, and a prolific writer having contributed significant tax commentary through his numerous articles, publications and conference papers. Mark has been regularly interviewed on Lateline Business in relation to current taxation issues, and is one of the few tax practitioners that has had his work cited in Australia's Parliament. Mark is a current member of The Tax Institutes Technical Committee, and former Chair of The Tax Institutes National SME Sub-Committee. Mark has been appointed by the Federal Government to the Board of Taxation - a non-statutory Board charged with contributing a business and broader community perspective in improving the design of taxation laws and their operation. - Current at 06 September 2016
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