The Business Council of Australia has set out five high-level principles for taxation reform to support investment, jobs and growth, and more efficient national wealth creation. The five principles are that:
1. The tax system should support investment and growth through a reduced reliance on taxes on capital and income and a greater reliance on broad-based taxes on consumption.
2. The tax system should be consolidated to contribute to the further growth and development of a seamless national economy, and should also enhance Australia’s international competitiveness.
3. The taxation framework should be characterised by stability and predictability. Any changes should be prospective, so as not to adversely affect existing investments or create perceptions of sovereign risk.
4. Tax arrangements should be transparent, simple to administer and minimise the compliance burden imposed on taxpayers.
5. The tax system should raise revenue through taxes that are less exposed to the volatility associated with the business and commodity cycles.
The BCA will use these principles to provide an initial response to the Henry tax review and to judge the tax reform policies of all political parties.