Payroll tax and stamp duty changes are demanded in NSW’s Budget next Tuesday in order to return NSW business competitiveness and encourage employment, says accounting firm BDO.
BDO Tax Director Paul Motta said NSW’s 5.65 per cent payroll tax made it much less competitive than Victoria, which last month cut its payroll tax rate to 4.9 per cent. Queensland has a lower rate (4.75 per cent) and a wages threshold (level before tax is payable) far in excess of NSW, and Western Australia has introduced a full exemption for small business with payrolls up to $1.6 million with a partial exemption for businesses with payrolls under $3.2 million.
“Despite mooted cuts in corporate tax rates, the burden for many businesses is actually likely to increase due to the rise in compulsory superannuation announced by the Federal Government following last month’s Henry Review,”Mr Motta said.
“On Tuesday, the NSW Government has the opportunity to make the state more competitive again as well as show it understands the plight of small business.” Mr Motta said.
“Indeed, the Government could do worse than create an environment that may even attract business to NSW. Stamp duty and payroll tax relief are two key elements that would go some way to improving the economy and business competitiveness compared with Victoria and Queensland.
“Without these reforms, international and national companies will continue to consider Victoria and Queensland as business destinations rather than NSW,
because the cost of managing and operating a business here are considerably higher.” Mr Motta concluded.