BDO survey finds ramped-up support for tax reform

26 April 2018

A poll conducted by leading Accounting and Professional Services firm, BDO Australia, has found that support for tax reform is high with many wanting reform to cover both Federal and State taxes.

Undertaking their seventh tax reform survey, involving more than 250 clients, BDO found huge support for tax reform, with 94% of those surveyed agreeing that the Government should recommence a broad reform process.

Of those surveyed, 78% supported the establishment of a Tax Reform Commission to provide advice to Government on tax reform.

National Tax Director at BDO Australia, Lance Cunningham, said: “The message for the Government is that taxpayers are still waiting for meaningful tax reform.”

“This can only begin with a renewed commitment to a holistic review of the tax system that examines the whole system and not the introduction of a number of piecemeal changes,” he said. 

Key findings from the survey reveal:

  • 71% say the small business concessions are too complex and need changing even if it means losing some of the concessions.
  • 73% agree the corporate tax rate cuts are necessary to ensure Australia remains competitive for international capital investment but less than 50% of respondents would use the corporate tax rate cut to employ more staff.
  • 70% support an increase in the GST rate and broadening of the GST base to allow genuine reform of the state taxes. Nearly three-quarters of respondents agreed changes to the GST were crucial in the inaugural 2011 BDO report. In the years since, this proportion has continued to grow, jumping to 87.5 % in 2014 and peaking at 90.3 % in 2015. GST is typically thrown in the ‘too hard’ basket of tax reform and should not only be increased but widened.
  • The top tax measure respondents believe is in need of greatest attention is State taxes. 90% of respondents believe State payroll taxes should be abolished or reduced as they discourage employment and are a disincentive to growing businesses and 80% want to see State stamp duty abolished.
  • Housing affordability remains a concern but respondents of this year’s survey don’t believe tax changes in the form of negative gearing or capital gains discount changes are the answer. 74% said that the Government should investigate what effect negative gearing restrictions have had in other countries such as the UK and the USA before implementing such restrictions in Australia. This is up from last year and may be attributable to the range of tax and superannuation measures that formed the centrepiece of last year’s Federal Budget to address housing affordability.
  • 75% say Fringe Benefits Tax should be abolished and replaced with a simplified system of taxing the employees but only on truly remuneration benefits and not on benefits that are incidental or ancillary to their employment duties.
  • International tax is an area that has received the Governments’ attention in the last few years. 36% of respondents believe that Australia’s new Diverted Profits Tax (DPT) and Multinational Anti-Avoidance Law (MAAL) are working to stop multinational companies from setting up in low or no tax jurisdictions to avoid Australian tax. This is down from 40.7% last year, which indicates that public confidence in Multinational Anti-Avoidance Law is slowing increasing.

“BDO is at the forefront of discussions around Australian tax reform which is why we’ve done this annual survey with our clients,” Mr Cunningham said.

“The feedback from the 2018 BDO Tax Reform Survey will inform BDO’s submissions and commentary in any response to the tax reform process and allow us to bring a wider perspective to the table when we participate in consultative forums with the Federal Government and the Australian Taxation Office.”

“We’re looking forward to the Federal Treasurer’s delivery of this year’s budget on Tuesday 8th May, to see if some of the issues raised as part of our Tax Reform Survey are addressed.”

“Following the budget announcement BDO will release a comprehensive report on the key fiscal and tax changes and provide an interpretation of these measures and their potential impacts on ‘mum and dad investors’, small to medium businesses and corporations.”

To view the survey findings visit https://www.bdo.com.au/en-au/tax-reform/tax-reform-survey-2018