“Some of the company tax measures announced today by the federal Opposition have the potential to slow economic growth and further diminish Australia’s competitiveness,” Business Council of Australia Chief Executive Jennifer Westacott said.
“While proposed changes to hybrid entities, reporting arrangements and the ATO’s funding could be further explored, the Business Council has serious concerns that proposed changes to thin capitalisation laws risk undermining major capital and infrastructure projects and deterring investment.
“This would come at a time when, more than ever, Australia needs investment to drive jobs growth and economic resilience.
“Thin capitalisation rules were tightened late last year and are amongst the most robust in the world. It would be surprising and disappointing to see ad hoc changes before the impact of these changes can be fully assessed.
“Australia’s suite of tax integrity measures are already considered some of the toughest in the world, with companies paying $70 billion a year in tax. As a share of total tax paid, this is the second highest in the Organisation for Economic Co-operation and Development (OECD).
“The OECD is considering proposals similar to those being proposed by the Opposition. If Australia moves ahead of the rest of the world, we need to put in place a thorough domestic process, including widespread consultation, to assess the risk of unintended consequences.
“The Business Council is acutely aware that the community must have confidence in the integrity of the corporate tax system if it is to support broader tax reform. This is why a careful and well-informed debate is a national imperative,” Ms Westacott said.
For further information contact:
Matt Newton, Communications Adviser
Business Council of Australia
Telephone (02) 8224 9207 • Mobile 0409 550 578