Tax Reform

Tax Forum

With the Government's Tax Forum having run on 4 and 5 October 2011, we were presented with the next opportunity for businesses and the community to engage in the tax reform debate. PwC was represented by Tom Seymour who was among the 180 participants. Tom leads PwC's Corporate Tax practice.

Over the course of the Tax Forum, many suggestions and ideas were raised covering the full ambit of Australia's tax and transfer system including business taxes, personal taxation, State taxes, tax governance, environmental and social taxes. Overall the Tax Forum met, if not exceeded expectations, albeit for many, those expectations were limited.

There was a strong mood amongst participants that there is a burning platform for tax reform and a strong expectation that the Government would move the agenda forward.

In a welcome move, Treasurer Wayne Swan, in his closing address to the Tax Forum, indicated that the Government will "draw on the priorities identified over the last two days as the building blocks for the next stage of ongoing tax reform" and indicated a number of immediate commitments that will be made, including the below:
  • A Business Tax Reform Working Group to be established to firstly consider, as a priority issue, the treatment of losses, and then look at longer term company tax options.
  • Treasury, the Australian Taxation Office and the Council of Small Business to work together in the coming months to address concerns around small business tax complexity.
  • The Treasurer indicated that a state tax reform plan will be developed in conjunction with the Commonwealth - the first reforms set out by the end of 2012.
  • For individuals, the Government indicated that its first priority around personal tax reform will be to increase the tax-free threshold further to at least $21,000, which should have the objective of having over one million individuals no longer needing to complete income tax returns.
As expected, both days presented a wide range of perspectives on solutions and priorities, however a clear takeaway was the importance of community dialogue and consultation on difficult reform issues.

While there a number of tax reform measures now already under way, such as the proposed Minerals Resource Rent Tax and the Carbon Price Mechanism, it would seem there is much more change and debate that lies ahead.

Key outcomes

Henry Review

Download our in depth analysis on the implications of the Henry Review recommendations and the Government's response.