The Henry Tax Review changes will address the ‘two speed economy’ with mining increasingly leaving behind small business and NSW and Victoria being met with an ‘unfair’ interest rate burden.
The Henry Review acknowledges that small business faces a disproportionate burden when meeting its tax obligations and two measures provide much needed relief says the National Institute of Accountants (NIA).
The small business initiatives that have been proposed recognise that the economy is experiencing a ‘two-speed’ recovery. The reduction in the small business tax rate and the ability to write-off capital assets faster will provide much needed impetus which will strengthen the non-resource related economy.
These two small business measures are contingent on the introduction of the Resource Super Profits Tax, which will be a 40 percent levy on profits of mining companies operating in Australia.
NIA chief executive officer Andrew Conway said the small business measures are welcome and these initiatives will provide cash flow benefits to small business.
“The reduction of the overall company tax rate is a will also be a positive measure to increase the international competitiveness of Australia’s company tax rate which has not kept pace with similar sized OECD countries,” he said.
“Whilst the Government’s response lacks detail we welcome the ongoing opportunity to participate in the tax reform agenda process to make our tax system fairer and simpler to meet the social, economic and environmental challenges that lie ahead,” Mr Conway said.