TABLE OF CONTENTS
Membership
Chapter 1 – Conduct of the inquiry
Reference from the Senate
Conduct of the inquiry
Government proposals relating to business tax reform
Contents of the report
Acknowledgments
Chapter 2 – The Government’s proposals
Introduction
Company tax rate
The present situation
Government proposals
Changes to entity measures announced in ANTS
Depreciation measures
Removal of accelerated depreciation
Capital gains tax measures
Integrity measures
Other measures
Chapter 3 – Economic modelling
Economic modelling of macroeconomic effects
The revenue neutrality requirement for the Review of Business Taxation
Modelling underpinning the Ralph Report and the Government’s response
The Dixon modelling
Summary comments on modelling
Growth dividend
Informed judgment or modelling? The Government’s response
Conflicting estimates
Should the growth dividend be included in the estimates?
Size of growth dividend
Chapter 4 – Capital gains tax
Introduction
Reform of CGT for individuals
Level of realisation of capital gains
Elasticities underpinning the Ralph Report and the Government’s response
Conflicting evidence on elasticities
Realisations of CGT – summary comments
Allowance for CGT arbitrage activity
The Government’s assessment of the likely level of arbitrage
Conflicting views on arbitrage activity
Scrip-for-scrip rollover relief
Averaging
Chapter 5 – Company tax and accelerated depreciation
Company tax
Accelerated depreciation and small business measures
Effects on major projects
Sectoral effects
Chapter 6 – Tax avoidance and minimisation
Tax avoidance, tax evasion or sensible tax planning
The Government’s proposals
Alienation of personal services income
Restricting losses from non-commercial activities
Measures affecting tax shelters
Improving the general anti-avoidance rule (Part IVA of the ITAA)
Denying losses on certain interposed companies
Changing dividend streaming and franking credit trading rules
Ongoing scrutiny
Chapter 7 – Research and development tax incentives
Brief history
Current level of R&D in Australia
Ralph proposals, endorsed by Government
Recent studies of R&D funding
Views expressed to the committee
Benefits to society of R&D
Appropriate level of tax concession
Is a general tax concession or targeted assistance preferable?
Attracting venture capital
The need for ‘patient’ capital
Impact on revenue neutrality
Chapter 8 – The committee’s conclusions
Government senators' report
Summary
The benefits of tax reform
Capital gains tax reform
Increased realisations of capital gains
Allowance for CGT arbitrage activity
Conclusion
Supplementary report: Australian Democrats
Introduction
The importance of revenue neutrality
Capital gains tax revenue - impact of elasticities
Other revenue risks
Additional costs
Appendices
Appendix A – Submissions
Appendix B – Public hearings
Appendix C – Dixon Report