STAFFORD, Australia - AussieJournal -- The Productivity Commission (PC) has been tasked by the Australian Government to conduct an inquiry into creating a more dynamic and resilient economy. The PC was asked to identify priority reforms and develop actionable recommendations.

The PC has now released its interim report which presents some draft recommendations that are focused on two key areas:

*Corporate tax reform to spur business investment
*Where efficiencies could be made in the regulatory space (ie, cutting down on red tape)
The interim report makes some interesting observations and key features of the draft recommendations are summarised below.

Corporate tax reform

The PC notes that business investment has fallen notably over the past decade and that the corporate tax system has a significant part to play in addressing this. The PC is basically suggesting that the existing corporate tax system needs to be updated to move towards a more efficient mix of taxes. The first stage of this process would involve two linked components:

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*Lower tax rate: businesses earning under $1 billion could have their tax rate reduced to 20%, with larger businesses still subject to a 30% rate.

*New cashflow tax: a net cashflow tax of 5% should be applied to company profits. Under this system, companies would be able to fully deduct capital expenditure in the year it is incurred, encouraging investment and helping to produce a more dynamic and resilient economy. However, the new tax is expected to create an increased tax burden for companies earning over $1 billion.

To learn more about the proposed approach to reducing red tape and more, visit our website. Based in Stafford, Queensland, we help clients across Brisbane with their accounting needs. https://mcfillin.com.au/dynamic-and-resilient-economy/