Give green light to small business tax cut
The Chamber of Commerce and Industry Queensland (CCIQ) is urging the Federal Government to focus on legislating a tax cut for small business.
The Senate seems unlikely at this stage to support the full package announced as part of the government’s tax reform package last May.
CCIQ believes the government is best placed to pursue a tax cut for companies with a turnover of up to $10 million.
There are signs in current negotiations that the Senate is prepared to legislate a cut in the rate from 30c to 27.5c in the dollar for companies with annual turnover of up to $10 million.
CCIQ urges the government to deliver on a tax cut for small businesses in the first instance and prosecute the remainder of the package at a later stage.
If the government is sensible, it will be able to deliver a tax cut to about 94 per cent of Queensland businesses, who also provide the largest share of total employment in Queensland.
Political pragmatism on the part of the government is the name of the game. If the current impasse on the entire Enterprise Tax Plan Package continues, the government risks having to abandon any tax relief in the short to medium term.
The Chamber implores Federal Treasurer Scott Morrison to compromise in the Senate and introduce the first tranche of the plan that covers small and medium businesses.
Overall, CCIQ supports the Enterprise Tax Plan in its entirety as a job creation measure, but wants to see the government lead a national discussion on structural and comprehensive economic and tax reform.
The Abbott Government commenced this process with a Tax White Paper that was then abandoned and replaced with the Enterprise Tax Plan as the Turnbull Government’s centre-piece tax policy.
There is no doubt that more competitive tax rates need to be applied to larger companies and multinationals to encourage investment and attract and retain business investment on Australian shores.
Nevertheless, at the expense of the business community not being granted any tax relief whatsoever, it is critical the Treasurer negotiates with the crossbench on achieving an immediate small business tax cut.
An immediate small business tax cut will not impact the budget bottom line as much as the whole package and will flow to mum and dad businesses who create jobs and invest in their local communities.
The government should move to split its 10-year, $48.7bn company tax reform bill to secure an immediate gain for small businesses in Queensland.
The government promised last May to extend the tax cut to companies with higher turnover in annual stages over a decade until all companies were paying 25c in the dollar from 2027.