Australian CEOs are significantly more concerned about the effects of tax law changes on their business compared to their global counterparts, according to a new study.
Big 4 survey flags Aussie tax law angst
KPMG’s 2018 Global CEO Outlook survey found that almost half (46 per cent) of Australian CEOs said changes to tax laws are causing them to think about altering their business operating models.
By comparison, only 28 per cent of international CEOs shared the same sentiment.
KPMG tax partner Grant Wardell-Johnson said the results reflect the widely-held view that Australia’s tax system is very complex both relative to the size of the economy and in absolute terms.
“Carve-outs and exceptions tend to diminish the effectiveness of a tax and certainly add to the costs of compliance,” Mr Wardell-Johnson said.
“We therefore should not abandon a goal of simplifying our tax system and transforming and improving the taxpayer’s experience with the tax system.”
Mr Wardell-Johnson also highlighted a “clear need to extend company tax cuts to companies of all sizes”, amid improving sentiments around the global economy and significant tax cuts in the US.
“With other high-taxed countries also announcing plans to reduce their company tax rates, it will become clear that after these changes Australia will have one of the highest company tax rates amongst advanced economies,” he said.
“In a competitive world for corporate capital flows, this is a barrier to investment and growth.”
The survey also found that appetite for mergers and acquisitions (M&A) was relatively subdued, with half of Australian CEOs saying M&A would only have a moderate impact on their overall organisation over the next three years, while 20 per cent said they are unlikely to make any acquisitions.
Regardless, 30 per cent of Australian CEOs still said they were likely to make acquisitions with a significant impact in the coming three years.
The survey covered 1,300 CEOs in in 11 markets and 11 industry sectors and was conducted between 22 January and 27 February.
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