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Australia’s company tax: Options for fiscally sustainable reform
Published on 01 Apr 18 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
The Australian Government proposes to reduce the company tax rate from 30 to 25%. However, there are widespread concerns that the fiscal cost is not affordable. This article considers alternative reforms of corporate taxation that could fund a corporate tax rate cut, while addressing key non-neutralities in the corporate tax system in an international context. The authors examine the case for abolition of dividend imputation in favour of a lower headline company tax rate and consider the spectrum of reform options for the corporate tax base, which ranges from the cash flow tax and allowance for corporate equity or capital to a comprehensive business income tax which would eliminate interest deductibility. These measures (which could co-exist in a hybrid system) might be accompanied by discounts on dividend and interest income at the personal level, in replacement of dividend imputation.
Author profiles
Prof Miranda Stewart CTA
Prof. Miranda Stewart, CTA, is a Professor at Melbourne Law School, The University of Melbourne and is an honorary Professor at the Tax and Transfer Policy Institute, Crawford School of Public Policy, Australian National University. Recent books include Tax and Government in the 21st Century (Cambridge University Press, 2022), Death and Taxes (Thomson Reuters, 2022) with Michael Flynn KC and Income Taxation: Commentary and Materials (Thomson Reuters, 2023) with Graeme Cooper, Michael Dirkis and Richard Vann. - Current at 27 May 2024
David Ingles
David is a Senior Research Fellow, Tax and Transfer Policy Institute, Crawford School of Public Policy, ANU.Current at 1 April 2018
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