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Ralph's Revolution creates a brave new world for Australian business

Publication date: 21 Sep 99 | Source: THE TAX INSTITUTE

The Taxation Institute of Australia today welcomed the release of the Government's response to the Review of Business Taxation's final report "A Tax System Redesigned" which appears to have preserved the fundamental integrity of the proposed package. The Institute was particularly pleased with the phased implementation of some key recommendations that will allow taxpayers and their advisers to cope first with Y2K and then the introduction of GST and PAYG.

"Tax professionals are very pleased that the Report and the Government's response are now available for assessment and public comment," said Taxation Institute of Australia President, Mr Gordon Cooper.

"Reductions in the corporate tax rate, concessions for small business, lower CGT and imputation refunds for small investors are all positives for the creation of a more competitive environment for business in Australia," he said.

"The deferral of the more radical reforms in respect of the new accounting system for tax (so-called Option Two) and the entity taxation arrangements (taxing trusts as companies) are welcomed by the Institute which has advocated their delay. This will enable further consultation."

"However, without a clear understanding of how these measures will impact upon revenue, it is too early to judge the package as a whole," Mr Cooper said.

"In addition, we believe the Government has missed an ideal opportunity to reform significantly the Fringe Benefits Tax system. Unfortunately they have not accepted a key recommendation contained in "A Tax System Redesigned" that benefits be subject to PAYE. Employers would have continued to be responsible for the collection of tax and benefits would have been taxed only at the marginal rate of the individual receiving them."