iscoverThe Tax Institute is proposing 10 key tax reform ideas to the Treasury ahead of the looming Economic Reform Roundtable to emphasise the need for tax to be a “top priority”.
Tax overhaul key to boosting growth and fairness, says The Tax Institute
04 August 2025
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8 minute read
As the Economic Reform Roundtable is fast approaching, The Tax Institute has outlined the crucial role of the tax system in the Australian economy and is calling for tax reform to be at the centre of the conversation.
In a submission to Treasury, Julie Abdalla, head of tax and legal, and Tim Sandow, president, said Australia’s tax system “was ripe for reform that could generate substantial social and economic benefits for Australian businesses and the community”.
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“Due to the crucial role the tax system has to play in the Australian economy, any economic reform agenda should incorporate tax reform as a top priority,” Abdalla and Sandow said.
“A well-designed tax system enhances efficiency, fairness and growth. Inefficiencies and inequities in the tax system can restrict investment, limit productivity and stifle economic output.”
The key reform ideas proposed included 10 main aspects, such as the establishment of an independent tax policy and reform commission, review of the personal marginal tax rate system, review of the childcare subsidy, reforming the existing CGT discount and simplifying the taxation of trusts.
Also proposed in the submission was a thorough review of the GST regime, an increase of the turnover threshold requiring businesses to register for GST, reform and simplification of the superannuation system, review of the generosity of investment concessions and finally the harmonisation of the ‘employee’ definition across federal, state and territory legislation.
In terms of the Institute’s specific tax reform proposals, it was noted that an independent tax policy and reform commission should be established to, “undertake a comprehensive review of the Australian tax system at the state and federal levels and to manage a process of tax reform, including the development of underlying tax policy, and ongoing maintenance of the tax system”.
Abdalla and Sandow added that the Institute had published various materials to assist the government in progressing tax reform, such as the Case for Change, Incoming Government Brief: June 2025 and its recent submission to the Productivity Commission.
The submission also noted a push for reform of CGT and GST, both of which were currently popular topics of conversation and debate across the profession.
Abdalla and Sandow said there should be reform of the “existing CGT discount so that eligibility for any discount is based on a scaling rate that increases the longer a taxpayer holds a CGT asset, is more reflective of actual rates of inflation in Australia, and better addresses concerns about market distortions from having overly generous tax arrangements for certain investments compared to others”.
For GST, it was suggested that the option to increase the rate by at least 2.5 per cent from 10 per cent to 12.5 per cent be considered with a view to future incremental increases.
According to the submission, this would align more closely with the OECD average and/or broaden its base to include certain goods and services that were currently exempt or otherwise GST-free.
“It is crucial that this should form part of a package of reforms to income taxes and the transfer system aimed at reducing the dependency in Australia on personal and corporate income tax, and ensuring lower-income Australians are not disproportionately.”
Abdalla and Sandow noted their recommendations to Treasury were simply “brief reform ideas” and looked forward to developing ideas further, constructively engaging with the government on tax reform and its practical implementation.
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