The Howard government introduced the Goods and Services Tax (GST) to simplify the tax system and reduce tax avoidance. The broad-based tax of 10 per cent applies to most goods, services and items sold or consumed in Australia. Next month marks 25 years since the GST was introduced - and an RMIT expert argues that it's time the system was reformed.
Dr Venkat Narayanan, Accounting, Information Systems and Supply Chain
"The GST is one of the most important taxes in Australia and yet it's the one that no one, especially politicians, wants to talk about reforming. This needs to change, given our over-reliance on income taxes.
"The GST is one of the most effective ways to tax those on higher incomes, but it affects lower income earners more. We need to look at ways to make compliance easier for taxpayers and put more effort into making sure that everyone pays their fair share.
"The GST is currently at 10%, there is no reason why we shouldn't be talking about increasing this gradually and over a period of time. Why not talk about a 10.5% GST for the next few years and increase it by 0.5% until we get to 15%, rather than just straight to a higher percentage?
"Any reform should consider income taxation, which we currently rely too heavily on, so that any increases to the GST do not disproportionately affect low-income earners."
Dr Venkat Narayanan is a senior lecturer in accounting at RMIT University. He is an expert in taxation and related policies and has undertaken research commissioned by the ATO.
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