“Re:think”, review – reflections on structural reforms

A strong foundation is essential if we are to achieve fundamental and lasting reform of our tax system. To achieve such fundamental change will require courage and a number of brave decisions to be taken.

“Re:thinking” the tax system

The beginning of the highly anticipated tax reform white paper process began on 30 March 2015 with the release of the government’s tax discussion paper, Re:think. This document promises to form the centrepiece of a wide-ranging debate around the future of Australia’s outdated tax system. Notwithstanding recent announcements in relation to the possible introduction of a diverted profits tax and the imposition of GST on streamed digital content, I remain hopeful that the document will still serve its core purpose.

Tinkering on the periphery with a handful of ideas such as these, in our view, isn’t enough and in fact may serve to inadvertently undermine the integrity of the white paper process. Having said this, we are encouraged to see that the discussion paper captures the breadth of the scope of challenges in front of the government regarding the existing structure of our tax system, in particular the fact that we have a mid-20th century designed tax system that needs to be modernised to efficiently and
effectively operate in the 21st century.

The Tax Institute has long argued for a simpler, fairer tax system in Australia, and the release of the tax discussion paper lays the groundwork for this rethink.

However, this is not just the time to “think” about the structural elements of the tax system, but to have a robust and mature debate on the significant issues affecting our tax system. This includes everything from alleged tax avoidance by multinational corporations through to the implications of bracket creep affecting individual wage earners that simply comes about by virtue of inflation.

The Tax Institute will continue to take a holistic view of the tax system and put forward to the government substantive ideas for reform to improve the foundations on which Australia’s tax system is built.

To do this, we have been drawing on the very broad-ranging expertise of members through our Technical Committees to assist us in preparing our response to the tax discussion paper in the nine weeks allocated. We will continue to be proactive as the process moves into its next phase and the generation of the government’s green paper.

I encourage members to get in touch with the Institute’s Tax Policy & Advocacy team at any time to put forward your views and suggestions for reform.

Stephen Healey CTA is President of the National Council at The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.


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