Small businesses stand to gain the most from the Howard Government's proposed tax reform package, which was announced yesterday.
The main boons for the industry include the removal of the wholesale sales tax (WST), stamp duty and FID charges, according to Greg Hayes, small business spokesperson for the Australian Society of CPAs.
The package revolves around a 10 per cent GST, which will be complemented by the following points:
The abolition or replacement by the GST a whole range of taxes including nine State and Territory taxes; wholesale sales tax; FIDs and BAD taxes; Provisional tax and the provisional tax uplift factor; and many stamp duties.
Industry costs will be reduced by more than 3 per cent after indirect reforms.
Businesses will be able to pay all their taxes once a quarter on one form.
Exemption from Capital gains Tax (CGT) on the sale of a business where the proceeds are used for retirement;A deferral of CGT where a SB is sold and the proceeds are used to purchase another small business;Fairer provisional tax through reductions in the uplift factor;Enhanced protection for small business under the Trade Practices Act against unconscionable conduct;Lower compliance costs for fringe benefit tax (FBT)Meanwhile, the IT&T Industry will be deeply disappointed at the relevation it will have to wait for the Government's promised comprehensive review of business taxation to gain the main item on its tax review wish list.
The Australian Information Industries Association (AIIA) is convinced abolition of the capital gains tax is the key to winning overseas investment in Australia's IT&T industries. However, the Howard Government's much-vaunted tax package has failed to deliver on this key hurdle, which AIIA chairman Alan Baxter says is crucial to the future of the industry.
The Government says it will consult with business on the taxation treatment of business investment, the prospect of further Capital Gains Tax relief and moving towards a company tax rate of 30 per cent.
For further coverage of the Howard Government's proposed tax reform, see the August 19 edition of ARN.http://www/taxreform.gov.au