INTHEBLACK April/May 2024 - Magazine - Page 21
Individuals who have taxable incomes
of less than A$146,486 – which is nearly
90 per cent of all taxpayers – will get either
the same or a larger tax cut under the new plan.
The remaining 10 per cent who have
higher incomes will get smaller tax cuts
than under the original Stage 3. The tax
cut for individuals who earn more than
A$200,000 a year – less than 5 per cent
of taxpayers in 2024–25 – will be halved,
from A$9075 to A$4529 a year.
However, while the forthcoming change
will lower the income tax burden for many
Australians, there is a broader view that
tinkering around the edges of the tax
system will not address the nation’s major
demographic shifts and structural changes.
ADDRESS THE KEY CHALLENGES
Elinor Kasapidis, interim chief learning
and innovation officer at CPA Australia,
says tax reform in Australia has been
challenging for decades, “but the reality
is that we need to change how and where
we generate our tax revenues from for the
future sustainability of Australia”.
“The OECD has highlighted that we are
far too dependent on income taxes, both
for individuals and companies, and we need
to see the GST contribute more to the
Australian tax base,” Kasapidis says.
“Australia’s tax system is complicated.
You have two different rates for companies
depending on how large you are. As we look
at the future with a declining population
paying tax, the burden on individuals is
becoming increasingly unfair.
“This year’s changes to the Stage 3 tax cuts
do nothing to resolve the fundamental issue
MALAYSIA
MOVES AHEAD
The Malaysian Government’s 2024
Budget contains a series
of reform measures Prime Minister
and Finance Minister Anwar Ibrahim
describes as “plugging the leakages
in the subsidy system”.
They include raising Malaysia’s
service tax rate from 6 to 8 per cent
on most items, introducing
a high-value goods tax at the rate
of 5 to 10 per cent and taxing capital
gains on the disposal of unlisted
shares at 10 per cent.
In line with the OECD’s Two Pillar
Solution, Malaysia will implement
the 15 per cent minimum tax for
companies with global revenue of
at least €750 million (A$1.24 billion)
from 2025.
At about 12 per cent of GDP,
Malaysia has a low tax base when
compared with the 34 per cent
average of OECD countries.
Alan Chung FCPA, head of the
indirect tax and transfer pricing
practices of Grant Thornton
Malaysia and chair of CPA Australia’s
Malaysian Tax Committee, says GST,
if reintroduced, would broaden
Malaysia’s tax base to reduce
the nation’s fiscal deficit.
“Other tax reforms can also be
introduced to reduce inefficiencies
and increase the effectiveness of tax
collections, which can help reduce
the shadow economy.”
intheblack.cpaaustralia.com.au 21
