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The government's contentious changes to corporate tax progressed in the Senate yesterday, but accounting bodies fear it will hit a wall today.
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Corporate tax changes edge forward but big barriers crop up
22 August 2018
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9 minute read
One of the Turnbull government's signature tax policies, which would see a staged reduction of the company tax rate, passed its second reading in the Senate yesterday.
It is the first order of business in the Senate today, but associations like CPA Australia are not confident it'll get over the line.
"Due to the current lack of numbers in the Senate - and unless something changes - the bill is unlikely to pass even with the amendments excluding Authorised Deposit-taking Institutions (ADIs) from the proposed corporate tax cut," said CPA head of policy Paul Drum.
Others, like Institute of Public Accountants boss Andrew Conway, is also doubtful it'll be smooth sailing for the bill in the Senate today. For public accountants, the consistent speculation about tax changes can be disruptive.
"Small business craves certainty. These tensions, and leadership spills, created instability for small business. It's no wonder that politicians are going down the pecking order in terms of respected professionals. The sooner these issues get resolved, the better," he said.
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Chartered Accountants Australia and New Zealand (CA ANZ) tax leader Michael Croker said the ongoing royal commission has hardened the resolve of some cross-bench Senators against the proposed tax cuts for all entities, including ADIs, hence the amendment to exclude such financial institutions.
While acknowledging the current impasse to lower the tax rate for all entities, CA ANZ is pushing for a unified rate of 25 per cent for all entities as part of a broader tax reform package.
"Chartered Accountants remain convinced of the need for Australia to have a more competitive company tax rate as part of a package of fundamental changes to the tax base," said CA ANZ.
"We urge the government to continue to seek support for its rate reduction plan, with the ultimate goal being a unified rate for all companies of 25 per cent as part of a broader tax reform package."
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