By The Editor
A state-by-state review of business taxes has found Victoria is the second lowest taxing state in Australia, with stamp duty identified as the one major area where improvement is needed.
Using a medium sized ‘reference business’ as a model and applying all state taxes to it, the Institute of Public Affairs found a business based in Victoria would pay nearly $257,000 (or 17.5 per cent of Commonwealth corporate income tax) – $6,000 below the national average.
If the same business was based in New South Wales, it would pay $13,000 more in state taxes, and nearly $25,000 more if it were a South Australian business.
When the figures were broken down, the Victorian business paid the second lowest state payroll tax (behind South Australia) and second lowest state land tax (behind Western Australia), but also paid the nation’s highest stamp duty rate – $20,000 more than Tasmania and Queensland. Selling a business property would also attract more tax in Victoria than anywhere else in the country.
The IPA’s Julie Novak said Victoria needed to “scale back its byzantine stamp duty regime”, as well as continue to cut other taxes.
Victoria has cut payroll tax from 5.75 per cent to 4.9 per cent over the past decade, and VECCI is urging the Baillieu Government to reduce that rate to 4.75 per cent by next year to underpin our competitiveness.
Victorian Treasurer Kim Wells said the Government was awaiting the interim report of an independent audit of Victoria’s finances, which will help guide its business taxation and financial policy.
Learn more about VECCI’s business priorities for 2011 on our website.
This is good – but it could always be better!
Vic is doing well but it is all relative – we don’t stack up well against trading partners like HK and Singapore.