On Monday, the parliament’s lower house passed the Turnbull government’s 10-year corporate tax plan, reducing the corporate tax rate to 25 per cent for all companies over the next decade. The legislation is now in the Senate’s court.
The company tax rate is currently 30 per cent for all businesses, apart from those with a turnover of less than $2 million which pay 28.5 per cent.
MYOB welcomes the move, with CEO Tim Reed telling Accountants Daily that lowering the company tax rate is crucial to encouraging companies to grow and invest, and to make Australia more competitive globally.
“Business is an ecosystem. Big business, small business, employees and the broader community win together when the economy grows,” Mr Reed said.
“Small business owners understand this, which is why they support cuts to company taxes for all businesses, both big and small.”
Mr Reed said that a drop to 25 per cent is a “great start”, but that further reductions would be encouraged.
“We do want to see the government looking to lower the company tax rates below 25 per cent, as it’s important we consistently evaluate Australian company tax rates in the global market to remain competitive,” he said.
Prior to the legislation going to the lower house, BDO partner Mark Molesworth told Accountants Daily that while looking at the corporate tax rate is good, holistic tax reform is still required.
“The Parliament needs to stop playing political football with tax reform,” he said.
“We suggest the federal government should be reinstating a holistic tax reform process to identify the many other inefficient and ineffective tax measures that are holding back the Australian economy.”
A recent BDO poll revealed that almost 83 per cent of respondents agreed that the government should reintroduce a broad tax reform process.
Also, 65 per cent of poll respondents agreed that the government should fast track the proposed 10-year corporate tax rate reduction from 30 per cent to 25 per cent.