Tax a top priority for directors

Multinational tax arrangements, such as transfer pricing, should be a top priority for reform in any comprehensive review of the current taxation system, according to the latest Director Sentiment Index (DSI). 

This is followed closely by state-based taxes such as payroll tax and the GST, according to the 2014 second half study conducted by the Australian Institute of Company Directors.

The study, which measures the opinions and future intentions of directors, is based on the views of 501 directors of private business, not-for-profit organisations and ASX-listed companies.

It found that directors’ sentiment regarding the level of corporate and personal taxation remains pessimistic, with almost 70 per cent of directors believing the level of personal taxation is too high.

In line with previous surveys, 42 per cent of directors believe the level of corporate taxation is too high, while 43 per cent think it is “about right”. 

In contrast, only 15 per cent of directors believe corporation tax is too low, compared to 6 per cent for personal taxation levels.

“It is clear that tax reform is now a significant item on the national reform agenda,” said John Colvin FAICD, CEO and managing director at Company Directors.

“Any debate about this issue needs to consider all aspects of taxation so that Australia can adopt a robust system that will generate sufficient public revenue without compromising business investment or entrepreneurial spirit.”

Directors cited productivity growth as the number one short-term priority the federal government should address, with taxation reform a close second.

For a full copy of the report, please click here.