Company income tax is a harsh reality for many medical businesses. However, one major industry group believes it’s important for the issue to be debated fully, to make sure companies are paying the most competitive rates available.
During the 2015-16 tax year, small business entities in Australia pay company income tax at a rate of 28.5 per cent. For other firms, this rate stands at 30 per cent.
Opening up the debate
The Business Council of Australia (BCA) explained the need for companies to become more competitive on a global scale. At present, the arguments for a more competitive tax aren’t balanced, which could mean accountants for doctors in Bankstown don’t have the full picture.
BCA Chief Executive Jennifer Westacott noted that there’s an assumption that investors will always accept reduced rates of return to be able to invest in Australia. Company tax rates are therefore important for attracting investment and making sure the national economy can continue to thrive.
“The idea that we should accept an uncompetitive company tax rate suggests we ought to be happy losing out in the global battle for investment,” emphasised Ms Westacott.
Under the current tax regime, Australian companies are currently paying some of the highest rates in the world. This has been the case for some time, as figures from a decade ago show companies paid 30 per cent tax in the 2005-06 financial year.
Benefits beyond the business community
The BCA stressed that if Australia’s competitiveness is able to thrive, the benefits will be delivered to the wider community. It’s not just companies and accountants for pharmacists in Strathfield that will reap the advantages, but also the Australian public.
Heading towards the election, there’s perhaps been no better time to pick up this debate and make sure all stakeholders have the facts to hand before drawing any conclusions.