According to CPA Australia it’s time to have a ‘rational debate’ about a number of reforms which could dramatically improve our economy.
Additional GST revenue can be used to abolish a number of inefficient state taxes’ according to a recent media release from CPA Australia – one of the world’s largest accounting bodies.
In a comprehensive report, CPA Australia has examined four different scenarios of changes to the base and rate of the Goods and Services Tax (GST).
Aside from raising revenue for a Government keen to restore surplus to the economy, a GST increase could also help eliminate inefficient taxes such as stamp duty on motor vehicles, insurance taxes, conveyancing duty and more.
Of course, the mere mention of increasing taxes, particularly GST, is almost always met with disdain from the public.
However, Alex Malley, CPA Australia chief executive says there’s a lot of fear and misinformation surrounding the GST that’s often ‘misplaced’. According to Mr Malley, it’s the way in which any proposed tax reforms are presented that will be most important:
‘It is the packaging of changes to the GST with the removal of other taxes that is critical, and is so often missing when it comes to the GST debate,’ he said.
As part of CPA Australia’s report, they examined the impact that GST changes (ranging from 10 – 15 per cent) could make, and the figures are astounding. At the farthest end of the scale, applying a 15 per cent GST to health, education and all food would raise $42.9 billion in the first year of reform. According to CPA Australia this would also make
Australian households $749.40 better off.
The table below depicts the impact of the four proposed scenarios on the Australian economy.
The table clearly demonstrates the rewards of raising the GST, but Mr Malley points out that the advantages are more than financial.
‘We have around 125 taxes and charges of which just ten collect 90 per cent of [revenue]. Households and businesses rightly want fewer taxes which are more efficient.
If Australia is to grow and compete globally we need a world-class tax system that incentivises businesses to grow, encourages innovation and attracts investment’ he said.
As contributing members of society both as tax-paying citizens and business owners, GST reform is something that all automotive dealers should be aware of. Now more than ever, Australia must decide how best to achieve economic stability (and prosperity) for the future and all should take part in the debate.
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