The release of the Henry Tax Review on Sunday is the most important tax policy event in a generation.
Despite the obvious flaw of the review process – not least of which is that it didn’t include any examination of the GST – the review process is likely to dictate tax policy for the next decade and will hopefully introduce some important reforms.
SmartCompany is sending founder Amanda Gome and reporter Patrick Stafford to Canberra for the pre-announcement lock-up and will send out a special Henry Tax Review edition on Sunday afternoon, analysing and examining the changes from the perspective of the SME and entrepreneur community.
We will bring you further reaction and analysis on Monday, and then on Wednesday, May 5, we’ll be hosting a special webinar with PricewaterhouseCoopers partner Karen Crawford to dissect the key implications from the review for SMEs. You can register for the webinar here.
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And don’t forget to check out our special Henry Tax Review page.
So what do SMEs really want to see out of the Henry Review? Here are a few items at the top of the entrepreneur wish list:
- The abolition of payroll tax. Unlikely to happen, but it’s always at the top of the list for SMEs. What is possible is that payroll tax is harmonised across the country, with the ATO to act as the collector of the tax. This would at least be a start.
- Lower corporate taxes. This one is a lot more likely. Any reduction in the 30% company tax rate would be welcomed by companies of all sizes.
- State tax clean up. Ken Henry appears to have spent a long time looking at the way Federal and State taxes interact and we know that for businesses it’s a mess, with some companies subject to more than 50 State and Federal taxes. This simply must be reduced.
- Simplified tax returns for SMEs and individuals. Another firm favourite to get up. It’s unclear just how small a business would need to be to qualify (we’re tipping its likely to be those companies identified as “micro” by the ATO) but less red tape is also welcome.
- No big increase in super taxes. Leaks this week suggest the Government is considering a big rise in the tax on super contributions from 15% to as much as 30%. Bad idea. We need to encourage retirement savings, not discourage it in any way.
- No general push to hit the wealthy. The threatened super contribution tax hike is seen as part of a potential push by the Rudd Government to increase the tax burden of the wealthy in favour of low income earners. We’re all in favour of an improved tax environment for people of all income levels, but we don’t want to see successful entrepreneurs unfairly slugged.
Stay tuned for SmartCompany‘s complete coverage over the coming days.