Two percent company rate cut will do little to improve Australian competitiveness, says DeloitteDOWNLOAD
Sunday, 2 May 2010: The underwhelming announcement of a 2% reduction in the company tax rate over two years from 2013 will do little to attract foreign investment into Australia, according to Deloitte International Tax Partner, Peter Madden.
“If the Government had accepted the Henry Review’s recommendation to move to a 25% corporate tax rate over the medium term, it would have assisted Australian-based companies to remain competitive on a global scale,” Mr Madden said.
“Instead, the government has opted only to reduce the company tax rate from 30% to 29% in 2013 and then to 28% in 2014, which leaves Australia above the average corporate tax rate in the Asia Pacific region.
“The proposed rate cuts of only 2% will leave Australian companies paying more in taxes than our Asian competitors.
“The Government and Dr Henry acknowledges its own commercial imperative to make Australia a more attractive place to invest with an internationally competitive tax rate yet has compromised on this imperative,” Mr Madden concluded.
To view all of Deloitte’s media releases on the Henry Review, go to the Deloitte Henry Review website.
NB: See our media releases and research at www.deloitte.com.au