Lower income tax cuts trade-off to lift GST
LOWER income tax could be the trade-off for raising
the GST, which remains one of the lowest consumption
taxes in the world.
Figures reveal 124
countries out of 200 have GST rates higher than
Australia’s 10 per cent levy, including the UK at 20
per cent, Germany 19 per cent, China 17 per cent and
New Zealand 15 per cent, with Hungary the highest
rate at 27 per cent.
Only four OECD nations
— Canada, Japan, the US and Switzerland — have lower
consumption tax rates than Australia, but some have
additional local sales taxes.
Most OECD
nations have increased the consumption tax rate at
least once in the past decade.
Australia’s GST has stayed the same since it was
launched by the Howard government in 2000. |
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There is now momentum for
change, with fresh calls for all sides of politics to
consider raising the rate and/or broadening it to
include more goods and services.
A Certified Practicing Accountants Australia (CPA)
report last week highlighted the broad economic benefits
of raising the GST to 15 per cent while cutting dozens
of other taxes, including income tax, vehicle stamp
duty, insurance taxes and convincing duty.
The report by KPMG estimated that increasing the GST to
15 per cent and applying it to all goods and services
would raise $42.9 billion in the first year.
Raising the GST to 15 per cent and cutting other taxes,
households would be $750 a year better off, the report
claimed. Raising the GST to 15 per cent but maintaining
exemptions on foods, education and health services would
raise $26 billion and leave households $100 better off
per year.
CPA chief Alex Malley urged political leaders to be
strong enough to tackle the GST.
Source::
The Daily Telegraph , dated 23/02/2015......... |
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