Taxation

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ACCI Stands For:
A Tax System that Supports
Economic & Social Development

And assists Australia's competitiveness & entrepreneurship

Policy Principles:

Australia needs a tax system that supports the achievement of agreed economic and social principles.
Australia’s competitiveness should be assisted, not harmed, by the tax system.

Tax revenue should be adequate to meet elected governments’ reasonable expenditure needs, consistent
with the exercise of fiscal responsibility principles. The tax system should be such that all taxpayers feel
confident and satisfied in complying with it.

A sustainable tax structure will only be achieved through an integrated package of reform across all
significant Commonwealth and State tax bases in the form of a balanced package covering consumption,
income and assets.

Policy Objectives:

  • Equity – there should be fairness in the distribution of resources between high and low income
    people as well as similar tax burdens for taxpayers with similar resources
  • Economic efficiency – taxation should impact neutrally on the economy and commercial decisions
    must not be skewed by tax considerations. The tax system should improve the competitiveness of
    Australia by encouraging productive investment, risk taking and economic growth and attracting
    capital and skilled labour
  • Adequacy – tax  systems should raise sufficient revenue for public expenditure needs, be
    sustainable in the long run and be consistent with fiscal responsibility
  • Simplicity – taxpayers being able to clearly understand and meet their obligations
  • Transparency – taxpayers should understand how and when they are paying tax and how much tax
    they are paying. Hidden taxes should be minimised
  • Limit costs – compliance and collection costs should be minimised
  • Limit evasion and avoidance – there should be minimum incentive and potential for evasion and
    avoidance of taxation
  • Consistency – tax policy should be internally consistent and consistent with broader Government
    policies
  • Flexibility – the tax system should be able to respond to developments in the economy and
    society, for example demographic changes, financial innovation, globalisation and the internet
  • Public perception – there should be the widest possible public support for the tax system

While changes in recent years to Australia’s taxation regime have improved equity,
sustainability and efficiency, there is still much more room for improvement.

Based on the tax design principles above, the main reasons for further reform of Australia’s tax
system include:

  • Improving the efficiency and international competitiveness of the Australian economy
  • Continuing Australia’s strong growth and productivity results
  • Ensuring Australia can meet long-term challenges, particularly demographic changes, in
    the most cost effective way
  • Promoting innovation, risk taking and entrepreneurship
  • Encouraging investment in human capital, for example through education and training
  • Encouraging skilled migration and the retention of skilled people
  • Reducing tax avoidance and evasion, to improve the perceived and actual fairness of the
    tax system