Company Tax Cut Deserves Bipartisan Support

Changes to company tax rates for small and medium-sized enterprises set out in this week's budget deserve bipartisan support according to the Australian Dental Industry Association (ADIA), the peak business organisation representing manufacturers and suppliers of dental products.

"The company tax plan in the budget set a clear path over ten years to reduce the tax burden on business. To provide business with the confidence to use these new policy settings to make business decisions, we call on all sides of politics to support the plan," said Troy Williams, ADIA Chief Executive Officer.

The budget proposes that from 1 July 2016 businesses with turnover less than $10 million will have a company tax rate of 27.5 per cent. The eligibility threshold for the lower rate will then be progressively raised until all companies are at 27.5 per cent in 2023-24. The rate will then fall to 27 per cent in 2024-25 and by 1 percentage point each year thereafter to 25 per cent by 2026-27.

"Two thirds of ADIA's members have turnover of less than $10million per year and it is these businesses that stand to benefit most from the changes to company tax set out in the budget. It will provide both the funding and incentive to reinvest in their business so that they can grow, create jobs and operate sustainably," Mr Williams said.

According to the World Economic Forum's 2012-14 Global Competiveness Report, Australia was ranked 20th out of 144 countries in terms of overall competitiveness. However, it is important to note that Australia was ranked 106th in terms of total tax burden. Thus, continuing tax reform remains the key to enhancing Australia's competitiveness and economic growth.

"For some time ADIA has had an established policy position that the business taxation should be no greater than the OECD average. The ten-year goal to reduce company taxation to 25 per cent achieves this," Mr Williams said.