Taxing Times

The Government release of Re:think, its tax discussion paper, is a welcome development, designed to kick-start the conversation with the community on a range of reform options designed to achieve a simpler and streamlined tax system capable of meeting the growing needs of an ageing population. I discuss some of the areas raised in Re-think which are of greatest interest to equity investors: how important income and consumption taxes are to Australia's tax take in a global context, the prospect of a growing drag from bracket creep on household disposable incomes (discretionary retailers), the outlook for the GST rate and base (supermarket retailers), the efficacy and viability of the dividend imputation system (high yielders with predominantly domestically oriented operations), the sustainability of the concessional tax treatment of superannuation (asset managers), and the risk associated with companies that have low effective tax rates. (VIEW LINK)