Tax experts wanting a well overdue 'root and branch' review of Australia's tax system are again likely to be left disappointed when Treasurer Josh Frydenberg hands down his budget in March.
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Tax advisers BDO say such a review is much needed in a modern and digitised economy, but instead expect a pre-election budget that will contain sure-fire sweeteners.
"We should expect all carrot and no stick for the masses," BDO tax partner Mark Molesworth told AAP.
He expects a further extension to the low and middle income tax offset and a commitment to maintaining small business tax concessions introduced to counter to impact of the COVID-19 pandemic.
Mr Frydenberg is keeping mum on such speculation.
The low and middle income tax offset, which was already extended in the last budget, is due to end in June and provides a tax cut of up to $1080.
It comes at a cost of $7.8 billion to the budget.
"We haven't made a decision as to whether or not we're going to extend the low and middle income tax offset. We have in previous budgets," Mr Frydenberg told ABC radio on Monday.
The beer industry also wants a 50 per cent cut in excise duty after feeling the impact coronavirus pandemic lockdowns.
Australian Tax Office figures show that pubs and clubs sold 40 million fewer pints of beer between July and September last year than they did during the same period in 2019 and before the COVID-19 hit.
Even so, the industry was hit with additional excise in February, with excise rates for alcohol indexed twice a year in line with the consumer price index.
"I know what the industry has been asking for, like all industries, and they put in budget bids," Mr Frydenberg said.
"They'll be considered, they'll be looked at in the context of all the different priorities we have."
While not holding his breath for proper tax reform, Mr Molesworth says with government debt expected to exceed $1 trillion by the end of the decade he hopes the government will tackle multinational taxation, as agreed by the Organisation for Economic Cooperation and Development.
He wants to see a clear timeline for the introduction of the OECD's so-called Pillar 1 and Pillar 2 measures for "at source taxation" and a global minimum tax rate of 15 per cent.
But with an election in the air, Mr Molesworth said there is no chance that either party is going to announce a tax policy that will possibly make any voter anywhere any worse off.
"All-in-all we expect this budget to be like many of its predecessors," he said.
"It will bring forward narrowly focused, piecemeal tax announcements and put big-picture, economy-enhancing tax reform measures off to another day."
Australian Associated Press
