The need for a cut in payroll tax in Western Australia has been made more urgent by announcements of reductions in Victoria and Queensland which will put WA further behind in business tax competitiveness.
The need for a cut in WA payroll tax has been made more urgent by announcements of reductions in both Victoria and Queensland which will put Western Australia further behind in business tax competitiveness.
CCI rejects totally the view expressed in the WA government's State Tax Review interim report released this month that payroll tax relief was not a priority.
A competitive payroll tax regime is an essential ingredient to ensuring an environment that is conducive to business growth and prosperity. On a per capita basis, WA is the highest taxing state and collects more from business than any other.
The need for business tax competitiveness has not been lost on other states, with both Queensland and Victoria offering payroll tax relief as the centerpieces of their respective state budgets brought down during the past week.
The Victorian budget announced payroll tax would be cut progressively down to 5 per cent by 2008 saving 20,000 businesses around $530 million. In total, the Victorians have offered $1.4 billion in business tax relief over the next four years.
Meanwhile, the Queensland Government - which already has the lowest payroll tax rate of the states - announced a lift in the payroll tax exemption threshold to $1 million, relieving an additional 600 employers from having to pay payroll tax at all and delivering reductions to another 4,000.
Some 90 per cent of Queensland businesses pay no payroll tax whatsoever.
Overall, WA is the highest taxing state on a per capita basis with the average West Australian now paying around $500 more per annum than the average Queenslander and $300 more per annum than the average Victorian.
In relation to payroll tax, Western Australia is the second highest taxing state on a per capita basis. Its rate of 5.5 per cent compares unfavourably with Queensland's rate of 4.75 per cent and Victoria's new rate of 5 per cent.
Payroll tax is the tax which has the greatest impact on business and is consistently regarded as the most undesirable tax from a business perspective. In a recent CCI survey, 60 per cent of businesses named it as the tax most in need of reform.
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Payroll tax reductions in other states heightens need for relief in WA
The need for a cut in WA payroll tax has been made more urgent by announcements of reductions in both Victoria and Queensland which will put Western Australia further behind in business tax competitiveness.
CCI rejects totally the view expressed in the WA Government's State Tax Review interim report released this month that payroll tax relief was not a priority.
A competitive payroll tax regime is an essential ingredient to ensuring an environment that is conducive to business growth and prosperity. On a per capita basis, WA is the highest taxing state and collects more from business than any other.
The need for business tax competitiveness has not been lost on other states, with both Queensland and Victoria offering payroll tax relief as the centerpieces of their respective state budgets brought down during the past week.
The Victorian budget announced payroll tax would be cut progressively down to 5 per cent by 2008 saving 20,000 businesses around $530 million. In total, the Victorians have offered $1.4 billion in business tax relief over the next four years.
Meanwhile, the Queensland Government - which already has the lowest payroll tax rate of the states - announced a lift in the payroll tax exemption threshold to $1 million, relieving an additional 600 employers from having to pay payroll tax at all and delivering reductions to another 4,000.
Some 90 per cent of Queensland businesses pay no payroll tax whatsoever.
These changes will exacerbate the extent to which WA remains uncompetitive with other states in the tax environment. Overall, WA is the highest taxing state on a per capita basis with the average West Australian now paying around $500 more per annum than the average Queenslander and $300 more per annum than the average Victorian.
In relation to payroll tax, Western Australia is the second highest taxing state on a per capita basis. Its rate of 5.5 per cent compares unfavourably with Queensland's rate of 4.75 per cent and Victoria's new rate of 5 per cent.
Payroll tax is the tax which has the greatest impact on business and is consistently regarded as the most undesirable tax from a business perspective. In a recent CCI survey, 60 per cent of businesses named it as the tax most in need of reform.
The WA Government clearly has the financial capacity to offer significant tax relief, as highlighted by the successive record surpluses that have been achieved in the last three years, including the projected $1.3 billion surplus in 2006-07. Indeed, it is in a stronger financial position to offer tax relief than any other state - including Victoria and Queensland.
CCI wants the Government to commit to staged reductions in payroll tax over the next few years from the current rate of 5.5 per cent down to less than the 4.75 per cent levied in Queensland.
At a time when the WA Government is enjoying the financial windfall of its growing revenue base, it is disappointing that it continues to dodge calls by business for necessary payroll tax relief when it clearly has the financial capacity to deliver it
