‘Collateral damage’: budget measure to exacerbate productivity lows: ACCI

“The business community is going to be the collateral damage in the government’s attempt to target investment in established property,” he said. 

“We once again urge the government to rethink its decision to increase taxes on business and address the need to make Australia a more attractive place to invest and do business.” 

While Alexander noted that small businesses that want to restructure out of discretionary trusts would get “rollover relief” from CGT for three years from 1 July 2027, he stressed that the budget did not take into account stamp duty costs triggered by restructuring.

“Paying stamp duty on top of being effectively forced into a higher tax structure would be a double whammy for small and medium businesses, when no whammy at all is justified,” Alexander said. 

He added that businesses will also incur considerable costs for accounting and financial advice to facilitate a restructuring into a corporate structure.

For Alexander, this “financial penalty” is a backward step.

“Australia has a serious problem with low investment and productivity … Imposing these new financial penalties on investment is only going to make a bad situation worse.”

As reported by Accountants Daily, Grant Thornton national head of technical tax, private enterprise and author of Tax Wars, David Montani, warned that this minimum tax has the potential to “kill off” bucket companies.

"It ... misses the bigger picture, which is the over-reliance of income tax in our tax system," Montani said.

Box Advisory Services founder Davie Mach said: “A business owner invests so much money, time, commitment, risk, personal assets, and takes up loans to invest in bucket companies, investing in their business. Now the ATO is saying that all should be equal. It doesn't make sense … you can't tax a business owner the same [as investors].”