Treasurer Joe Hockey questions whether GST and company
tax will exist in 40 years
Treasurer Joe Hockey has cast doubt on whether the
GST and company tax would exist in 30 years, as
online trade and intense competition between
countries erode these taxes as revenue sources.
"The world is changing remarkably, and whilst you
would have easily assumed 10, 15 years ago that, for
example, the GST is going to be an enduring tax ...
with global trade, with the development of internet
commerce, with not just the transaction of the sale
of goods over the internet but increasingly
services, there are going to be more and more goods
and services that are provided from offshore under
free-trade agreements that is going to miss that
net," Mr Hockey told Sky News on Sunday.
"My view is you would have to question whether in 30
or 40 years' time taxes like the GST or company tax
will be around," he said.
Mr Hockey said
Australia faced "intense competition" on tax rates
from the United Kingdom, New Zealand, Singapore,
Hong Kong and other countries.
"Capital is more mobile than ever before. Companies
are no longer particularly wedded to individual
countries – they will move around the world," he
said. |
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Australian Chamber of
Commerce and Industry chief executive Kate Carnell said
uncertain tax bases were one of the great challenges
facing governments.
"What tax bases look like in
the future, when you've got a truly global economy …
It's certainly an issue that we're all grappling with.
The only solid tax bases are ones associated with land,
because you can't move it," she said.
Even
revenue from direct income tax was under threat because
of labour mobility and "disruptive" new employment
arrangements, she said.
Ms Carnell said the problem underscored the importance
of developing "solid and consistent" global tax rules.
"Because if we don't we're all in trouble fundamentally,
because people will pick and choose on where they pay
tax based upon what's the best outcome for them and for
their companies.
" Ms Carnell said her organization was contributing to
working with the International Chamber of Commerce and
the Organization for Economic Co-operation and
Development to develop such a global approach.
Budget expert Chris Richardson, of Deloitte Access
Economics, said the threats to GST and company tax
revenue were "real and growing."
"Having said that, GST and company tax will be providing
revenue for many years to come," he said.
Mr Hockey said the government would release a discussion
paper on tax reform next month.
Source:::
Sydney Morning Herald , dated 08/03/2015......... |