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The business network has called for urgent tax reform to support Australian small businesses and taxpayers.
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Major tax reform critical to SME growth, government told
29 January 2025
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7 minute read
The Australian Chamber of Commerce and Industry (ACCI) is pushing for federal tax reform to benefit small businesses and taxpayers in its pre-budget submission.
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ACCI revealed tax reform was “at the top” of its list of recommendations and wanted the government to establish a tax and federation commission to give advice on tax reform options to begin the process of comprehensive tax reform.
ACCI chief executive officer Andrew McKellar said tax reform was long overdue in Australia.
“It’s been more than two decades since we had proper tax reform. The system is complex, costly and uncompetitive. The tax system businesses and taxpayers face is no longer fit for purpose,” he said.
In the submission, the network also called for the reform of corporate tax rates and suggested the company tax rate be reduced from the current level of 30 per cent down to 25 per cent.
ACCI noted this was a critical area that required attention as it was high relative to other comparable Organisation for Economic Co-operation and Development (OECD) countries.
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In 2024, Australia’s company tax rate of 30 per cent was 7 percentage points higher than the OECD average and the third highest of advanced economies, after Portugal and Colombia.
McKellar said the government needed to address this sooner rather than later to become competitive on a global scale and to help the country’s small businesses.
“Australia has the highest corporate tax rates in the G20, meaning that our businesses are left at a serious competitive disadvantage with their competitors in other countries,” he said.
“At a time when the incoming US administration is announcing plans to cut its corporate tax rate to 15 per cent to make US businesses more competitive, Australia needs to act on this competitive weakness.”
In order to achieve this, the submission made by ACCI recommended extending the small business 25 per cent corporate tax to cover all small to medium enterprises by increasing the base rate to a turnover of $250 million, with a reduction to 25 per cent extended to all businesses at the earliest feasible opportunity.
McKellar added that another way small businesses could be helped was by supporting the ACCC and the Reserve Bank to make merchant fees more transparent and strengthening measures against anti-competitive behaviour.
“In every proposed legislative or regulatory measure, the government should clearly articulate the anticipated impact on small business within any policy impact analysis generated,” he said.
“We also suggest for the government to begin developing a tiered incentive system to encourage employers to take on more apprentices and trainees, with priority going to small businesses and regional businesses.”
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