PwC highlights need for Australian tax reform
The Government will be unable to fund the basic services that Australians want if it fails to achieve major tax reform, PwC has said, reports Tax News.
PwC has released its submission on the Government’s Tax Reform White Paper process. Tom Seymour, Managing Partner Tax and Legal, said: “Successful tax reform is about gaining trust. Trust in the political and bureaucratic process. Everything should be on the table – there are no sacred cows or panaceas – the whole tax mix needs to be reviewed.”
In particular, the Government will need to demonstrate its willingness to offer “compensation for an increase or broadening of the goods and services tax (GST) in a transparent, fair, and – critically – a sustainable way.” It should also “demand that changes to the GST only be pursued if bipartisan support could be garnered.”
Seymour cautioned the Government not to pursue “narrowly defined solutions,” such as the abolition of concessions on negative gearing and superannuation, or the collection of more company tax. These options “fail to consider the broader impact of a tax mix on the economic performance of the country, and arguably will not address the range of shortcomings currently present in Australia’s tax mix,” he said. The Government should instead rule out these options.
“Comprehensive tax reform will not be based on changes to one or two taxes, but rather a package of tax measures will be required to address current distortions and support economic growth. … If this debate is to provide a ‘once-in-a-generation’ opportunity to examine the whole tax system, this is what the process should allow,” Seymour concluded.
