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One of the big four accounting firms has predicted a significant shake-up of stamp duty and lower-tier taxes, with "behind the scenes" discussions tipped to influence rules on a state and federal scale.
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Big four tips looming stamp duty tax reforms
07 July 2016
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9 minute read
Speaking at a lunch event in Sydney, KPMG tax partner Grant Wardell-Johnson tipped the removal of stamp duty, saying it is an inefficient tax so there is significant potential for reform in this area.
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"On the state level, there is potential to move away from this very inefficient tax to property service-based taxes which are quite efficient," said Mr Wardell-Johnson.
"The discussion is pretty behind the scenes at the moment, but I think many of the key state governments realise that’s certainly the direction they need to go."
While it could be difficult for each state to bring in these reforms on their own, he said, a joint move between all the states and potentially the federal government is likely to have more success.
"There are also reforms on smaller levels the government could embrace; you can take cost out of the economy which will lead to great efficiency," he said.
"For example, we have many different rules for the employee contractor divide; if you were to have uniform rules for all questions, be it superannuation, income tax, payroll tax, workers compensation on that divide, it would be very, very beneficial."
Mr Wardell-Johnson said there are also different rules on what constitutes a dividend for corporate law purposes and tax purposes that could be amended.
"We have changes in the accounting income recognition rules in the future, this alignment between tax and accounting in that space that would [also] be beneficial," he said.
He also noted the House of Representatives inquiry into work-related expenses prior to the election and flagged this as another area for potential reform.
"They would have issued a report to the government, and the government would have contemplated certain things and said let’s defer some of those changes until after the election," he added.
Later in the year, he said, the ATO will also try to quantify the size of the black economy and conduct a tax gap analysis.
"So you can expect in October a release of material in that space and that will put pressure in a number of spaces in terms of doing something about that economy," he said.
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