Bracing for the 2017/2018 Federal Budget

valori opzione binarie oro With just a few weeks to go until the Federal Budget, it’s a good time to assess what people are saying about our expectations of Treasurer Scott Morrison.

buy Pregabalin 75 mg capsule In the lead up, Australian taxpayers have embraced the opportunity to have their say about the critical issues impacting individuals and businesses. BDO received more than 1,200 responses from people who participated in the firm’s Quick Poll survey to share their thoughts on the key issues of tax reform, corporate tax rates, housing affordability, negative gearing, the 50% CGT discount, and R&D tax incentives.

source link Respondents indicated that there is still much more to be done for holistic tax reform and the next phase of the enterprise tax plan. There has been an overwhelming 83% response agreeing to the contention that the Government should reintroduce a broad tax reform process that covers both Federal and State taxes, and that is incorporated into a broader reform process including infrastructure and urban planning, population growth and ageing issues, energy, security and climate change.

go here BDO asked similar questions about which tax measures were in most urgent need of reform in all the previous BDO Tax Reform Surveys from 2012 to 2016, and the results indicated that respondents consider one-off tax changes to try and fix certain aspects of the tax system may not be effective, and that the Government should consider the economy and the whole tax system including State and Federal taxes to achieve wider reforms. Interestingly, 65% of respondents indicated that the Government should accelerate the proposed 10-year corporate tax rate reduction from 30% to 25%. Survey participants were also in support of a reduction in the corporate tax rate and to fast-track the proposed ten-year reduction down to 25%. However, there is less support of going further to reduce the corporate tax rate down to below 20% in trying to be competitive with other countries (e.g. the UK and as proposed for the USA).

see url These results indicate that the poll respondents support the Federal Government’s argument that the reduced corporate tax rate will encourage economic activity. However, the respondents also appear to understand that other budget constraints may come into play if the Government reduces the corporate rate further to 20% or below.

Another finding of the poll was 70% of respondents agreeing that the Federal Government should introduce tax changes to ease housing affordability. Respondents seem to want tax changes to relieve the pressure of housing affordability but generally don’t want those tax changes to be in the form of negative gearing or CGT discount changes.

follow site This apparent inconsistency points to the complexity of the myriad of factors that contribute to housing affordability. These factors are quite broad and, although there may be tax aspects involved, respondents may consider these to be ancillary to the major economic factors of supply and demand. It will be interesting to see how (or if) the government deals with the housing affordability issue. Certainly, the Reserve Bank of Australia Governor, Mr Phillip Lowe, has expressed his concern about banks providing loans to badly stretched borrowers and insists that the supply side of the housing equation is what must be addressed to solve the problem.

strumenti per fare treining APRA has indicated to banks that it would introduce lending limits on interest only loans. No question that sound lending practices are a key part of the equation and whether this should be accompanied by a change in tax policy will require careful consideration.

ninja trader demo In relation to GST, 61% of respondents agreed the GST rate should be increased and/or the GST base broadened to enable State Governments to abolish stamp duties and/or other inefficient State taxes. This question links back to the BDO Tax Reform Surveys from 2012 to 2016, which had a similar series of questions with similar respondent results. Changes to increase the GST rate and broaden its scope and reduce or abolish stamp duty and other inefficient taxes have continued to be supported through BDO polling.

With superannuation, most commentators would not expect there to be any further amendments. Last year’s Federal Budget introduced some of the most significant changes in the past ten years, which means that individuals and advisers have a number of matters to action before the new rules commence on 1 July 2017. Nonetheless, taxpayers will be waiting to see whether they will be able to access their super, to help with the purchase of their family home.

Another poll finding was 70% agreed the Government should continue to simplify tax issues for SME businesses. In particular, for SME companies to be treated as partnerships so shareholders are taxed on a ‘flow through’ basis. The responses to several questions in the 2016 BDO Tax Reform Survey also showed strong support for tax simplification for SMEs and was even stronger in this year’s Pre-Budget Poll than it was in last year’s Tax Reform Survey.

A large number of SMEs operate through trusts, particularly discretionary trusts and the tax issues that result from running businesses through trusts can be very difficult to navigate. Many small business owners and their advisers struggle to fully understand the complexities of the interaction of the trust law and tax law. So allowing SME companies to be taxed on a ‘flow through’ basis could provide an alternative to this complexity while also providing the commercial protection of operating through a corporate structure.

The upcoming Budget will be released at an interesting time in the political and economic cycle and, based on the results from the Poll, this is an important opportunity for the Government to stabilise Australia’s future for families and businesses.

Dr Mark Pizzacalla, Business Services & Tax Advisory Partner, BDO.

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