The South Australian government has taken the first steps in reforming the state's tax system, releasing a discussion paper suggesting possible reforms that include changing payroll tax and scrapping stamp duty.
SA makes first move on tax reform
This week, the government released the State Tax Review Discussion Paper detailing a number of options under consideration to reform the state’s tax system.
Premier Jay Weatherill said he expects the discussion paper will stimulate an informed debate and encourage businesses, industry and advocacy groups, and individuals to put forward ideas that are competitive, sustainable and fair.
The discussion paper covers a range of taxes including payroll tax and land tax.
In regards to payroll tax, the paper suggests four reform options:
• Lower (remove) tax-free threshold and rate
• Remove exemptions and lower rate
• Replace with cash-flow tax
• Phase out tax-free threshold above a certain payroll value
The paper also suggested stamp duty could be replaced by an annual land tax, estimated to be around $1,200 per year for a median-value home ($410,000).
Premier Weatherill said the state government is open to radical tax reform.
“Nothing is out of bounds, be it taxes, levies or concessions," he said.
South Australian Treasurer Tom Koutsantonis said the discussion paper provides a summary of the state’s current tax system and canvasses tax reform options that have been suggested in the past through various tax reviews.
“The discussion paper includes a range of information not normally available, including the estimated budget impact as well as potential incidence effects on taxpayers of certain taxation reforms,” Mr Koutsantonis said.
“It is important to note that the discussion paper canvasses ideas and options for state taxation reform as a first key step in engaging with the community.
“This information is intended to encourage an informed debate on tax reform and provide a useful resource for those in the community that wish to contribute to this process,” he said.