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Global SME tax policy conundrum
Published on 01 Apr 08 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
There is a real mystery surrounding why so much time seems to be spent by governments around the world on providing small businesses with tax concessions, without seemingly fully understanding, or properly explaining, to their constituents how such tax initiatives fit within their wider tax policy framework. This article examines Australia’s small to medium sized enterprises (SME) tax policy vis-à-vis those of other developed countries, and concludes that Australia has never really had a formal, well defined, articulated tax policy on how it deals with small businesses vis-à-vis small to medium sized businesses and larger businesses. In Australia, this lack of policy direction has resulted in tax initiatives in the SME sector being introduced in an ad hoc and reactive fashion, and has contributed to policy makers failing to properly identify and target relevant tax concessions in this sector. Interestingly, it is concluded that Australia is not alone and that other governments around the world have also struggled to come to grips with setting appropriate tax policies in relation to SMEs with political expediency and bandaid solutions being the only two real constants in the quest for SME tax policy direction.
Author profile
Dr Mark Pizzacalla CTA
Dr Mark Pizzacalla, CTA is Partner-in-Charge of the Business Services practice of BDO in Melbourne, and is integrally involved in the firm’s Tax and Advisory practice. Dr Pizzacalla’s business experience, including acting as Managing Partner of his predecessor firm, gives him a strong appreciation of both the strategic and operational issues facing business and provides relevance to the technical tax advice he delivers. Dr Pizzacalla completed his PhD in relation to the taxation of SMEs in Australia and is one of the few tax practitioners whose work has been cited in Australia’s Parliament. Dr Pizzacalla is a member of The Tax Institute’s Victorian Technical Committee, and is a former Chair of The Tax Institute’s National SME Sub-Committee, as well as being a former Victorian State Councillor. Dr Pizzacalla was appointed to the Board of Taxation in January 2015 and was reappointed for a further three-year term commencing 1 January 2018. - Current at 04 July 2023
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