IPA: consider zero tax rate to drive start-ups, productivity

THE Institute of Public Accountants (IPA) has recommended the Australian Government considers a dramatically lower – or even, a zero tax rate for small business – in order to drive productivity and future economic viability.

Key to the proposal is an invigoration of Australia’s vital start-up sector.

According to IPA chief executive officer, Andrew Conway, this would mean that for “at least a specific period”  the income tax rate for new small business start-ups would be zero.

“If we cannot currently afford a zero tax rate then the IPA supports a substantially reduced income tax rate,” Mr Conway said.

The recommendation has come out of the IPA’s Australian Small Business White Paper which puts forward a range of tax initiatives to assist small business and made just prior to the latest Federal Budget. 

“It must be recognised that the long term well-being of the nation is dependent on the productivity and growth of the small business sector,” Mr Conway said.

“Taxation and the associated regulatory burden is a key factor in strangling small business efficiency and productivity.

“If we remove the inefficiencies in the tax system and apply a much lower or zero tax rate to small business instead of multiple tax concessions, we would gain greater productivity and efficiency levels and a healthier economy.

“There would be significant scope to redirect some of the existing tax concessions to new start-ups or entities in the early growth to encourage entrepreneurial behaviour, drive economic growth, as well as improve productivity and competitiveness,” Mr Conway said.

www.publicaccountants.org.au

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