The IT industry has banded together to lobby the Federal Government to reform the taxation system, revitalise capital gains tax and ensure that R&D concessions are retained.
Comprising of the Australian Information Industry Association (AIIA), the Australian Telecommunications Industry Association (ATIA), the Australian Interactive Multimedia Industry Association (AIMIA) and the Internet Industry Association (IIA), the Tax Alliance will begin the arduous task with an examination of the capital gains options discussed in the Ralph review.
AIIA deputy executive director Rob Durie asserts that a reformed capital gains tax will result in an energised IT industry. "We will come up with a preferred tax option and then lobby the Federal Government.
"Our major focus will be to work with PricewaterhouseCooper and relevant Government departments on our submission which is due on April 16th."
The submission will include suggestions to lower the rate of capital gains tax, optimistically to US levels of 18 per cent but Durie is realistic and will be pushing for a 30 per cent levy, down from the present 36 per cent. "It should be a lower rate, particularly for individuals who have held investments in start-up companies for a number of years," asserts Durie. The Tax Alliance will also recommend "better treatment of script exchanges and the retention of the 125 per cent tax concession for R&D", claims Durie, explaining that this provision has been tampered with in the past. "The reduction in capital gains tax will decrease the value of this concession," he says, prompting the Tax Alliance to ensure that the R&D concessions value remains constant in real terms.
Durie is confident that the process will prove successful, citing the support of several ministers as cause for optimism. "The Tax Alliance has strong arguments it can put forward. A capital gains tax is vital to create a dynamic entrepreneurial environment. Already half a dozen Federal Government ministers have come out in support of a revised capital gains tax."