According to research provided by KPMG International's 2015 Global Tax Rate Survey, tax rates are bound to increase as governments attempt to repay debt and accommodate for an increase in social welfare.
The survey notes that although tax rates are not increasing at an alarming rate, governments worldwide are more inclined to widen the tax base in an attempt to bring in extra revenue.
Compared to global counterparts, Australia has heavier direct taxes and lower indirect taxes according to KPMG.
The average value-added-tax (VAT) rate now stands at 15.79 per cent, compared to the 10 per cent GST enforced in Australia.
David Linke, KPMG Australia national managing tax partner, noted that the Australian tax system should expect added scrutiny.
“The study shows that indirect tax rates have a natural optimum range between 15 per cent and 20 per cent. In the medium term, most countries will settle on a rate in this range.
“Australia’s current GST rate and relatively thin base will also come under increased scrutiny,” Mr Linke added.
As a result of the recent OECD action plan to address base erosion and profit shifting (BEPS), Mr Linke noted that personal tax will be affected due to increased reporting requirements.
“It will become much easier for countries to track who has been working inside their borders and for how long. Tax authorities can be expected to look closely at the contribution that globally mobile employees are making to profits generated in their jurisdiction.
“They will no doubt look for opportunities to levy social security, personal and even perhaps corporate taxes,” Mr Linke concluded.