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2009-10-23

Tax refrom limited not by GST but by lacking imagination

Comments on Neil Warren “With GST ruled out tax reform limited”, 23/10/2009, http://www.theaustralian.news.com.au/story/0,25197,26246830-5017272,00.html

The Henry Review is constrained by being unable to touch the GST.

However, that does not necessarily mean that constraint is really restricting the Review's capacity to have a far-reaching design of a new tax system.

For example, the Review could introduce a national VAT to businesses and abolish other inefficient transaction taxes such as stamp duty on conveyances, as well as the different State payroll taxs.

Having said that, I must it does not seem the Review has ever considered a VAT.

So I think the Review does not have enough creative thinking and that is a pity.

Although I share Warren’s view that this tax reform will be limited, but differ from him in terms of the causes. It is not the constraint on the GST, it is the lack of creative thinking.

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