INTHEBLACK November 2025 - Magazine - Page 25
Australia’s tax system is facing
declining revenue growth.
Reforming the GST could
create efficiencies in the
tax system.
Comprehensive tax reform
is needed to ensure the
GST is a viable revenue source.
GST reform:
In focus
After 25 years, the goods and services tax (GST) is at a crossroads,
with calls for reform growing louder as Australia grapples with an
evolving economic landscape and a tax system that relies heavily
on income taxes.
Words Alexandra Cain
THE GOODS AND SERVICES TAX
(GST) has been a fulcrum in Australia’s tax
system since 2000. Designed to be a
broad-based, 10 per cent consumption tax,
the GST, together with new wine equalisation
and luxury car taxes, was meant to replace the
sales tax system. The GST was also designed
as a mechanism for the federal government
to transfer growing levels of guaranteed funds
to state and territory governments.
However, the GST has been beset by
complexities, and the economic landscape
is very different now compared to 25
years ago. A quarter of a century after its
introduction, there are plenty of eyes on the
GST as the answer to some of the tax system’s
inefficiencies and inequities.
“Australia’s tax base is being eroded by
a declining share of consumption taxed
under GST, coupled with a fall in revenue
from other consumption taxes like tobacco
excise and fuel,” explains Jenny Wong,
tax lead, policy and advocacy, CPA Australia.
“This highlights the urgent need for
alternative, resilient revenue streams,
with the GST a primary candidate.”
The federal government hasn’t ruled out
raising the GST rate. Fifteen is the most
commonly proposed percentage level, backed
by bodies like public policy organisation
the Grattan Institute. While many food
products and health services were initially
carved out of the GST, there’s now the
potential to broaden the range of goods
and services to which the GST applies.
WHY CHANGE IS REQUIRED
There are baked-in inefficiencies in the
GST base that were necessary to gain
Senate support to pass the A New Tax
System (Goods and Services Tax) Bill
in 1999.
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