Australia To Kick Off Corporate Tax Cut Plan

; posted on
May 31st, 2018

It has been confirmed by Mathias Cormann, the Finance Minister in Australia, that a new company tax legislation and an income tax package will be submitted to the Senate before parliament rises in late June. Under the new package, the government proposes to cut the company tax rate from 33% to 25%.

Peer Pressure from Tax Cutting Trend

In 2016 September, the government introduced the Treasury Laws Amendment (Enterprise Tax Plan) Bill 2016 to reduce the corporate tax rate for corporate entities, making this plan “even more important and more urgent now” according to Cormann. “The United States has legislated to lower their business tax rate to 21%. Since we went to the last election, even France has decided to lower their business tax rate from 33% to 25%. Countries around the world, who are focused on the best interests of working families and their respective economies are making sure that their businesses are not put at a competitive disadvantage. In Australia, we must do the same,” Cormann added.

Inseparable Three-Stage Income Tax legislation

The government affirms not to divide its three-stage income tax legislation, under which the low-income and middle class are to receive benefits in the first stage and the third stage receives the most resistance because it flattens the tax scale. Cormann points that the opponent “has to make a decision whether he wants to stand in the way of personal income tax relief for low and middle-income earners.” The government has been continuing talking with crossbenchers over the two tax packages this week.

Sources: The Guardian, the Conversation

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