Earlier this week, the Labor Party announced a plan to tax discretionary trusts at a flat rate of 30 per cent. Opposition leader Bill Shorten confirmed that the tax would affect 315,000 trusts, with 200,000 of those being related to small businesses.
MYOB chief executive Tim Reed has expressed concern on how this tax could potentially impact genuine small business owners across Australia.
“MYOB supports efforts to bring about a fairer and more equitable tax system and one in particular that helps small businesses grow,” Mr Reed said.
“Whilst we see benefits of reviewing trust arrangements, we would be strongly opposed to any changes that would negatively impact genuine Australian small businesses.”
Mr Reed emphasised that tax reform should be looked at more broadly with the goal of reducing uncertainty for small businesses.
“MYOB believes for a productive discussion around tax reform, we should be looking at the entire tax system, including company tax, rather than aspects which might have popular appeal only,” he said.
“We also call on all parties to support the recent changes in the definition of a small business to one that has revenue of up to $10 million, and thereby remove the uncertainty of tax increases if there is a change in government, allowing business owners to invest with confidence.”
Accounting body Chartered Accountants Australia and New Zealand also slammed the proposal and called for holistic reform.
“What we’re seeing from the major parties is a piecemeal approach, with a bit of extra income tax tacked on here and a specific deduction denied there. The message conveyed is that something is being done to someone else to tax them more heavily,” CA ANZ head of tax Michael Croker said.
“Meanwhile, Australia’s income tax system remains dangerously over-reliant on PAYG collected from Australians in the top tax brackets and company tax paid by a comparatively small group of large companies.”