Contact: Vessa Playfair
Deloitte
Director of Communications
+61 2 9322 7576

Contact: Michael De Palo
Deloitte
Managing Partner - Tax
61-2-9322 5940

The Federal Government’s rosy economic forecasts were being underwritten by its faith in continuing strong corporate tax revenues, according to Deloitte.

Deloitte says the Federal Government has budgeted for an increase in company tax receipts from $37 billion in 2003-4 to $47 billion in 2007-8.

Deloitte’s Managing Partner of Tax, Michael De Palo, says corporate Australia is becoming a cash cow and bearing the weight of Federal Budget spending.

He said company tax receipts had already leapt from an estimated $32 billion in 2002-3 to $37 billion this financial year.

“Australian companies are effectively funding Budget handouts, but they are still waiting for many of the benefits of the tax reform process,” Mr De Palo said.

“Reforms to the consolidation of tax returns are still a work in progress and there is continuing concern over compliance costs and treatment of losses.

“And the Federal Government will be relying heavily on the Australian Taxation Office stepping up its compliance efforts to ensure that company tax receipts reach the forecast levels over the next four years.

“Already the Commissioner of Taxation has signalled a harder line on tax compliance, with a warning to boards and their directors to sharpen their focus on tax risk management,” Mr De Palo said.

“It’s clear that the corporate sector has been overlooked for major positive tax reforms, yet it will be heavily relied upon to ensure the Government delivers Budget surpluses.”