Tax compliance holding back Aussie businesses
(10 May 2016 – Australia) According to Alleasing’s Equipment Demand Index, 42 percent of micro businesses say that tax compliance has a negative impact on their capital equipment intentions.
However, just under 34 percent of both small to medium-sized enterprises (SMEs) and corporates agree that tax compliance is a burden.
According to Alleasing’s Chief Executive Officer, Daniel Blizzard, tax is a topical issue at the moment, following the Government’s pledge to reduce the tax rate in last week’s Budget announcement.
“The government is focussed on finding ways to encourage investment and improve productivity,” Blizzard said.
“Strong uptake of the A$20,000 accelerated depreciation measures for small businesses released in the 2015 Budget has been reported, however, it’s clear from our research and our daily dealings with Australian firms, that more needs to be done.
“While the tax reduction for businesses has been welcomed, Australia’s corporate company tax rate will still be higher than neighbouring countries, including Indonesia, Singapore and Hong Kong. In addition, the reduction is not expected to result in the release of enough capital to spur investment in much-needed assets that would also positively impact the nation’s productivity. If this continues, we risk losing investment and innovation.
“Other markets such as the United Kingdom, which successfully implemented an annual investment allowance for certain assets up to £200,000, have seen flow on effects, including an increase in investment and capital expenditure.”
The Equipment Demand Index also found that confidence in both the domestic and global economic conditions have greatly decreased. In the last year, Australian businesses’ level of confidence for the Australian economy has dropped by one fifth, while nearly 42 percent of businesses said the volatility in the global economy is having a direct impact on asset intentions.
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