On Friday 17th October 2008, PricewaterhouseCoopers’ provided a submission to Australia’s Future Tax System Review of Australia’s tax and transfer system. This submission focused on the issues which we believe are of most importance to the design of a taxation system.
We believe that a successful and achievable outcome for the Review is the design of a world class system of taxation (including globally competitive rates of taxation), that will underpin the economic and social prosperity of Australia for the foreseeable future.
Our submission seeks to highlight the problems we believe should be addressed by the Review Panel, and to identify possible approaches to reform. Our comments and perspectives in relation to tax reform concentrated on those issues where we believe our experience allows us to provide practical insight and perspective.
Download review
Henry Review Submission [PDF 372 KB]
Our key recommendations
- Even though the AFTS’s Terms of Reference excludes GST, the Review Panel should endeavour to reform the taxation system so that there is less reliance on income taxation and greater reliance on consumption like indirect taxes.
- The overall rate of tax (particularly income tax) should be reduced and the system(s) imposing tax refined to a world class standard to make it relatively easy and competitive to do business in this country.
- In reducing the overall tax impact on business, we believe that the Review Panel should be focussed on ensuring the maximum reduction in the corporate tax rate rather than narrowing the base of taxation.
- Consideration should be given to other mechanisms beyond superannuation to encourage savings and investment.
- The number of taxes imposed by all Australian governments needs to be significantly reduced and the process of eliminating inefficient State taxes is far from complete, and needs to be re-invigorated and harmonised.
- A robust compliance cost reporting mechanism should be a feature of new tax law – at the design, implementation and administration phases.
- Tax collection by one national taxing agency, replacing the various Offices of State Revenue, would radically improve the efficiency of the current process.
- We supports consideration of ways in which audited entities can make greater use of their financial reports for income tax purposes.
- Consideration should be given to reducing the number of individual taxpayers (particularly employees) who need to lodge a taxation return, and simplifying the experience of those who continue to lodge taxation returns.
- The re-write of the Income Tax Assessment Act 1936 should be completed so that Australia has one income tax act.
- The use of the taxation system as the delivery mechanism for welfare payments needs to be re-considered.
