Today’s announcements in the US compound the need to act on business tax rates or be left behind, the Australian Chamber of Commerce and Industry said today.
James Pearson, Chief Executive of the Australian Chamber, said:
“Yesterday the Global Competitiveness Index confirmed that our tax rates already rank as the second biggest challenge to doing business in Australia.
“Around the world, governments are reducing their business tax rates to better compete for investment and create jobs.
“Other countries are moving faster and further in reducing their tax rates and if we stand still, we will be left behind.
“The longer we wait for the full business tax reductions announced in the 2016 Budget to be legislated, and for the Opposition to confirm it will support the changes already legislated for SMEs, the longer we wait to see the benefits of making our tax rates more competitive.
“Treasury modelling shows over 60 per cent of the benefit of a business tax cut ultimately goes to households.
“History has shown that, in Australia, when the business environment is improved and company tax rates reduced, company tax receipts have bounced back in just a few years as companies have greater earnings on which to pay tax. That’s happened after business tax cuts made by Coalition and Labor governments.
“Already, the slight uptick in the economy has seen the government collect over half a billion dollars more company tax receipts than predicted in the last financial year.
“We need to lock in the improvements we have already seen, and to do this, we need to see legislated business tax rates that enable Australia and Australian business to compete with the rest of the world.”