The Organisation for Economic Co-operation and Development (OECD)’s recently released Corporate Tax Statistics report details that Australia’s marginal effective corporate tax rate is on the upper end in comparison to other OECD countries and that lower taxes are important for competitiveness.
The report follows the OECD’s Economic Survey in Australia, released in December 2018, which states that Australia’s economy is ‘projected to continue at a robust pace’ and that the country’s debt-to-GDP ratio ‘remains relatively low’, providing ‘sufficient room to support activity… in the event of an unexpected downturn’.
The OECD’s Corporate Tax Statistic Report outlines the downward global trend on corporate tax rates, with the average rate falling by 7.2 percentage points from 28.6 per cent in 2000 to 21.4 per cent in 2018.
OECD’s report further highlights that tax is a factor that drives cross-jurisdiction competitiveness for investment.
In response to the document’s release, Treasurer the Hon. Josh Frydenberg said the Liberal National Government introduced legislation to reduce Australia’s company tax rate and increase the nation’s competitiveness internationally, but Labor voted against this tax relief.
He added that the Liberal Government has provided tax relief for Australia’s three million small and medium-sized businesses five years earlier than planned.
Mr Frydenberg concluded that the Liberal Government is committed to supporting businesses and recognises that it’s the private sector that employs roughly 9 in every 10 workers.
“We understand that by providing tax relief, businesses keep more of their own money and have more to invest back into their business – to create jobs, to boost productivity and grow,” Treasurer Frydenberg states.