My letter published in the AFR today.
In "Abolish imputation
to fund company tax cuts"(February 10), Innes Willox suggests abolishing imputation to fund a cut in the corporate tax rate to
20 percent to stimulate
foreign investment
as our rates compare unfavourably with the OECD.
But Australia's 30per cent headline rate, although higher than
some Asian and European
nations, is largely
in line with Canada, France, Germany, Italy,
Japan, Britain
and the-United States. I doubt a reduction to 20 per cent
would stimulate increased overseas investment since decisions are mostly
based on achieving before-tax hurdle returns.
Invariably, large-scale foreign investors seek and are often granted incentives from governments.
But what we seem to have at the moment, according
to our exasperated
tax commissioner, appearing before a Senate inquiry, is
a propensity for some large-scale
multinationals to continue with their contrived arrangements
resulting in only nominal
rates of tax
being paid. Such entities
seem unlikely' to be
persuaded by a 20per cent rate.
