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Think broadly and act on tax reform now, says Tax Institute

Publication date: 27 Feb 98 | Source: THE TAX INSTITUTE

The Taxation Institute of Australia has called upon the Howard Government to think broadly and to act now to reform Australia's tax system in its submission on Tax Reform in Australia delivered to the Gibson Committee today.

"Without urgent major overhaul, Australia's tax system will continue to place Australian business at a competitive disadvantage in the global economy", said Taxation Institute of Australia President, Mr Richard Gelski.

"Any delay to the reform process will have serious flow-on effects for employment, social security cost and the Australian lifestyle," he said.

The Institute's submission details nine key areas which need to be addressed as a matter of urgency:

- the introduction of a single-rate, broad based consumption tax at a rate of 10% - corresponding repeal of sales tax law - some reduction of personal income tax rates for low income earners - standardisation of employee deductions - the return of some stability in superannuation, and the abolition of the superannuation surcharge - the abolition of Fringe Benefits Tax, and its replacement by employee-based taxation of "salary sacrificed" benefits under the PAYE system - the introduction of joint tax returns for individuals, which will make a wide range of current tax minimisation practices redundant - the formation of two new Advisory Boards in relation to Tax Policy and in relation to Tax Administration - allowing experts like the Taxation Institute of Australia to genuinely participate in the legislative process in a meaningful way, to help eliminate bad law before it is enacted.

"In addition to these nine key areas, the Howard Government needs to address reform of capital gains tax legislation, review the taxation of trusts, eliminate the bias against companies in the current law, improve the taxation of internationally-focussed businesses and implement significant administrative changes particularly in the area of operation of tax agents," Mr Gelski said.

The Taxation Institute will meet with the Gibson Committee in Canberra on Friday 6th March to discuss its submission in detail.