Accounting association CPA Australia has called for a reform of the Goods and Services Tax (GST) to address the tax’s structural weaknesses and to ensure the tax system is sustainable for the future.
As the nation marks 25 years since the GST’s introduction, the accountancy body has set forth a five-step plan to broaden the tax base and reduce the overreliance on personal income tax.
The GST, which commenced on 1 July 2000, has been a subject of debate due to its unchanged nature and design.
CPA Australia’s proposed plan includes achieving consensus among state and territory governments, identifying a broadened tax base, assessing the impact on society, developing rebalanced tax settings, and designing a thorough implementation program.
CPA Australia chief executive officer Chris Freeland AM emphasised the urgency of GST reform, stating it is a crucial step to lower the government’s reliance on personal income tax.
Chris Freeland AM said: “It’s time for a grown-up conversation about Australia’s tax system and the GST’s structural weaknesses. For the past quarter of a century the GST has remained virtually unchanged, and its inconsistencies and design flaws – such as taxing some foodstuffs and not others – have been ignored.”
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By GlobalDataThe reform aims to alleviate the government’s dependency on personal income tax and support economic growth.
The Organisation for Economic Co-operation and Development (OECD) statistics indicate that Australia’s reliance on income tax is unsustainably high compared to other countries.
Chris Freeland AM added: “Of course, you also have to look at who would be impacted, such as lower-income households and pensioners, to make sure they’re adequately compensated during the transition.”
“Milestone dates aside, this is now the time to develop a step-by-step approach to deliver once-in-a-generation reform of the tax system while educating and informing the public of its necessity along the way. Broad public and political support will be essential to ensure our tax system is fit for purpose for at least another 25 years.”
The proposed GST reform will be detailed in a submission to the Treasury ahead of the Economic Reform Roundtable.
Earlier, CPA Australia supported Prime Minister Anthony Albanese’s announcement of a productivity roundtable set for August 2025, which seeks to engage business sectors and stakeholders in enhancing the nation’s productivity.
