SYDNEY, 1 July 2020: The Tax Institute welcomes the release today of the Thodey draft report into tax reform, Supporting the road to recovery.
“It is refreshing to see some hard issues being raised and addressed in regard to our tax system,” said Andrew Mills, CTA (Life), The Tax Institute’s Director of Tax Policy and Technical.
“Twenty years to the day since GST was introduced in Australia, the tax system is in dire need of significant reform. This year’s bushfires and the COVID-19 pandemic have made the need for a more simplified, efficient and resilient tax system clear. The draft report addresses some of the most urgent and important needs.”
“This is not a time for ruling in or out any aspect of tax reform – to do so would be shortsighted and would short-change Australia’s future.”
The report correctly identifies those areas of the GST and state taxes that need to be changed to respond to a changing world.
“We need a broader base for our GST – there are a number of concessions in the GST that narrow the base and reduce GST revenue, which should be reviewed. And following the ACT’s lead on replacing inefficient stamp duties with a more efficient broad land tax over time is a no-brainer,” said Mr Mills.
“However, it can’t stop there. We must learn from past success. To be truly effective, tax change must be broad based and address all tax areas. And it must also be coupled with the social security system to ensure that we protect the most vulnerable in our community – it must be progressive.”
The Tax Institute, as a leading membership body for tax practitioners in Australia, is looking to provide a strong voice for its members and to help shape and steer the conversation around future tax reform.
“Tax reform is critical to strengthening Australia’s economy as we recover from some major hurdles. The Tax Institute is committed to amplifying the voice of the tax profession in that reform discussion,” Mr Mills said.