Published on 01 Apr 08
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
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.
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