8 March 2005

Australia’s peak business tax group, the Business Coalition for Tax Reform (BCTR), today urged that the reform of State and Territory taxes must be a high priority.

The BCTR has prepared a submission on State and Territory business transaction taxes for the consideration of the Commonwealth, the States and the Territories in the review of the remaining taxes listed in the Intergovernmental Agreement of 1999.

Referring to the BCTR Submission, Mr John Stanhope - BCTR Chairman, said that the States and Territories need to find a method to rapidly remove outstanding inefficient state taxes.

The first step in reforming State and Territory taxes should be to complete the tax reform program foreshadowed by the State and Territory Governments and the Commonwealth as part of the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations of 1999 (the IGA). The BCTR considers that all States and Territories have the capacity to remove at least some of the remaining IGA taxes from 1 July 2005.

The BCTR feels that the primary responsibility for financing the removal of these taxes rests with the States and Territories. However, “the Commonwealth, as the initiator of the IGA and in the interests of national welfare, can also help facilitate the timely removal of these taxes” said Mr John Stanhope.

The BCTR proposes states and territories commit to a program for removing their ineficient taxes in lock-step with their growing GST revenue base over the next few years.

“The removal of outmoded business taxes will encourage greater productive investment and job growth” said Mr Stanhope.

The Business Coalition for Tax Reform (BCTR) is a forum for bringing together the views of the business community on tax reform issues. The BCTR aims to promote and improve Australia’s taxation system. While much has been achieved in recent years in the tax reform arena, the task is ongoing with much still to be done.

The BCTR’s submission on State and Territory Taxes is available on the BCTR website on www.bctr.org

The members of the BCTR include Australian Food and Grocery Council, Australian Industry Group, Australian Institute of Company Directors, Australian Retailers Association, Australian Stock Exchange, Business Council of Australia, Corporate Tax Association of Australia, CPA Australia, Council of Small Business Organisations of Australia, Federal Chamber of Automotive Industries, International Banks & Securities Association Australia, Insurance Council of Australia, Investment and Financial Services Association, Master Builders Australia, Meetings Industry Association of Australia, Minerals Council of Australia, Property Council of Australia, Real Estate Institute of Australia and The Institute of Chartered Accountants in Australia.

Contacts:

Peter Verwer, Chair, BCTR State Taxes Committee (CEO, Property Council of Australia), 0407 463 842 (02) 9033 1900.

Peter Burn, Chair, BCTR Tax Administration Committee (National Senior Adviser, Australian Industry Group), 0418 104 030 (02) 9466 5503