The Property Council of Australia (ACT) has again called on the ACT Government to abandon a range of inefficient business taxes to make Canberra the most business friendly, tax efficient jurisdiction in Australia.
Property Council Executive Director, Catherine Carter, said that the ACT Government should particularly focus its attention on the removal or phasing out of duty on commercial conveyances as a matter of urgency.
“Duty on commercial conveyances is the most inefficient, detrimental tax applying to investment in the property sector. This tax was due to be abolished as part of the 1999 Intergovernmental Agreement (IGA) on reform of Commonwealth/State financial relations,” Ms Carter said.
“The GST was introduced specifically to eliminate efficient taxes – nine of them; all of which are listed in the agreement signed by every State and Territory in 1999. It says so in the very first objective of the 1999 agreement. There’s no shirking the point.
“Stamp duty on commercial property conveyances is on the list – in fact, it is the least efficient of all nine taxes according to Access Economics. That’s because taxes on commercial conveyances feed directly into higher rents and consumer prices (and inflation).
“Stamp duty on commercial property conveyances has a direct and adverse impact not only on the property industry, but also has negative flow on effects to the overall ACT economy.
“In the next four years, the ACT Government will derive $231.4 million of extra GST over and above the guaranteed amount. With that amount of money, it is well able to afford to abolish all nine taxes. Yet Treasurer Ted Quinlan has identified the removal of only a few of them, and only on a very staged basis. The cost to the ACT over those four years is $13 million. Business will be paying double taxation.
“In terms of tax, it was supposed to be one way or the other. Currently business is slugged twice – through old inefficient nuisance taxes which are still being levied, and the GST.
“This is a very important issue for the ACT. The Government has a tremendous opportunity to create a pro-business, pro-economic development policy which will benefit the entire Canberra community. It’s time to move on this now”, Ms Carter said.
Catherine Carter, Executive Director, 02 6248 6902 or 0412 330 079