Leaning on company tax not an option
The Financial Services Council (FSC) welcomed the Tax White Paper, and said depending on personal and corporate income tax to fund public services is no longer an option.
It argued Australia's level of company tax and inefficient state taxes is hampering the country's level of competitiveness.
FSC chief executive, Sally Loane, said the tax review has to be comprehensive and everything should be put on the table.
"Issues which are being fiercely contested in the public arena right now such as the family home, tax treatment of superannuation, the pension assets and income tests, personal and company tax rates, the GST and capital gains, all should be considered in the review," she said.
"While these are tightly held, they need to be part of the review if Australia is to truly reform its tax system to ensure it is efficient and effective relative to other countries in the region."
Loane said the financial services industry, which is growing at six per cent per annum, is happy to assist in forming policy.
Accounting firm William Buck said despite the tax discussion paper, small to medium enterprises (SME) still have to bear the burden of complying with the tax system.
Out of 800,000 companies in Australia, just 2000 of them pay two thirds of the total company income tax.
"SME businesses incur nearly half of the total tax compliance costs, but contribute only one third of company tax payments," tax director Greg Travers said.
Travers said areas like loan and payments from private companies, the taxation of trusts, and the eligibility conditions for various concessions adds complexity.
He proposed a special purpose small business entity as a way of cutting tax compliance costs for SME businesses.
The Australian Institute of Superannuation Trustees (AIST) called for better targeting of tax concessions in superannuation, citing research that found the top 10 per cent of income earners gained from Government support for retirement incomes.
"We need tax concessions to encourage people to save for their retirement but we also need to find the right balance between supporting super savings and providing tax breaks that are fair and workable," AIST chief executive Tom Garcia said.
AUTHOR
Malavika Santhebennur
Recommended for you
ETF provider VanEck has announced its intention to launch a uranium and energy solution as global political agendas point to expansion in this sector.
PIMCO has announced the launch of a new active fixed-income ETF, marking its fifth active solution on the Australian market after the launch of four ETFs earlier in the year.
With the Australian advice market being a target for US private equity firms, a US advice commentator has shared lessons from his overseas experience, and why PE may be less attractive than initially expected.
Financial advisers are reminded to ensure their CPD is up to date with the Financial Services and Credit Panel making its second determination in a week after an adviser failed to meet the requirements.
