Creative industries need holistic tax reform boost, says The Tax Institute

The NSW government noted it was committed to the cause and sector as the state was a “hotspot” for $122.3 billion industry, leveraging the case for supercharging it through tax reform.

Julie Abdalla, head of tax and legal at The Tax Institute, attended the summit as a tax law and policy expert in the ‘unlocking giving and growing audiences and engagement’ sessions and provided technical expertise to attendees, while also providing feedback on the summit.

Abdalla said it was wonderful to witness the importance and need for tax reform taken seriously and to be part of the robust discussion and ideation in the room.

“The arts sector is a vital part of Australia’s economic, social and cultural fabric. The tax system can help or hinder growth and investment in the arts, just as it can in any other sector. This is an important piece of the puzzle.”

“We commend the NSW government for leading this initiative and it was positive to see so much support for reform from representatives of other States and the Commonwealth.”

“Their commitment to a concerted effort to achieve tax reform reflects the unified approach we need to achieve better outcomes across the system.”

The institute has been active within the tax reform conversation, as well as the conversation in relation to bolstering the arts sector through the reform, and noted in a submission before the summit that a “holistic strategy for tax reform is the best way to ensure the desired outcomes”.

A large contributing factor to The Tax Institute’s active voice within the movement was attributed to the significant crossover between the arts community and the SME community, based on many performers, artists and other creatives operating as small businesses or sole traders.

The Institute is also calling for tax reform as fringe benefits tax and superannuation guarantee systems also involve high administration costs and resource commitments, which could be unmanageable for small business owners or sole traders within the arts sector.

However, Abdalla noted there was severe complexity around the definition of what constituted a small business and whether or not operating as a small business differed depending on what part of the tax law was being looked at.

Abdalla said that could make it difficult for people within the arts industry to understand their tax obligations, as well as disincentivising them from looking to grow and develop their business for fear of getting it wrong.

“If we want to see growth and investment in the arts sector, we need to cut red tape, make the rules simpler, and reduce instances where our tax system is a barrier to growth.”