Last week Ken Henry said while he supports a cut in the corporate tax rate, it’s distracting from the broader need for comprehensive and meaningful tax reform.
"Cutting the company tax rate is only a small part of a required restructuring of our tax system, and that in turn is only a small part of the policy reform program that will be required if we are to ensure that all Australians have the opportunity to choose a life of real value," said Mr Henry.
Mid-tier firm BDO echoed his sentiments, and went so far as to label the attempts at tax reform in Australia as a “smouldering heap.”
BDO client surveys, which have been running since 2011, show 75 per cent of participants would be happy for the government to re-visit the recommendations of the Henry Tax Reform Review.
“BDO fully supports Ken Henry’s call for a return to the Tax Reform process that has floundered in recent years,” Lance Cunningham, national tax director at BDO, told Accountants Daily.
“The so called “root and branch” tax reform process, that was ignited by Ken Henry’s 2010 Australia’s future tax system report, gave a detailed framework for such a holistic tax reform. However, the tax reform process has turned into a smouldering heap with all sides of politics just picking on single issues instead of looking the bigger picture,” Mr Cunningham said.
“While the current concentration on company tax rate reductions is justifiable to ensure Australia’s competitiveness in international capital markets, it should not be seen as tax reform,” he said.
Professional accounting bodies and mid-level firms alike have been publicly advocating for meaningful tax reform in Australia in the years since the Henry Review. The closest any government has come to addressing those calls is the tax white paper process, which has been dormant since 2016.