The Australian Taxpayers’ Alliance welcomed the fast-tracked cuts to the corporate tax rate for small and medium-sized employers (SME). Today, Wednesday 1 July 2020, the corporate tax rate for businesses making less than $50 million will drop from 27.5 per cent to 26 per cent. Next year the coalition will further reduce the corporate tax rate to 25 per cent. However, for large employers, the 30 per cent rate will remain in place.
“This is a step in the right direction,” said ATA Policy Director, Emilie Dye. “But with an average OECD corporate tax rate of only 21.4 per cent, we are still far from becoming internationally competitive.”
“While it seems counterintuitive, the federal government is leaving money on the table by keeping the corporate tax rate so disproportionately high. Large multinational corporations don’t pay tax in Australia, instead of going to great lengths to legally avoid our taxes.”
“The Australian government has shown they can spend billions of dollars at the drop of a bat; we don’t need to ease into tax cuts. Unemployment has reached 7.1 per cent. Now is the time for the right kind of fiscal stimulus: tax cuts.”
“If Australia is to recover fully from COVID-19, we need more dramatic tax cuts and real structural reform of the tax code. Making the corporate tax rate internationally competitive is just the first step.”
Point 4 of the ATA’s five-point plan for a post-COVID-19 Australia is building up the local economy by making Australia globally competitive. Lowering the corporate tax rate is the first step to stronger domestic businesses.
Find the full report here.