A Dual Income Tax System for Australian Small Business: Achieving Greater Tax Neutrality?

Abstract
This article explores the notion of tax neutrality and its relationship to the taxation of business structures, especially for Australian small businesses. In particular, it analyses whether the introduction of a dual income tax (DIT) system, as advocated by Pitcher Partners could achieve this. It will be argued that a DIT does have the potential to improve tax neutrality and may remove business structural biases that exist in Australia. Furthermore, it will be argued that steps towards tax neutrality would be likely to be achieved through greater alignment of the individual marginal tax rates and that with businesses.

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The Effects of Regulatory Change on Taxpayer Compliance Behaviour in the Building and Construction Industry

Abstract

Using the results from a comprehensive telephone survey of home builders during 2007-8 and 2014-15, we provide an analysis of the behaviour, characteristics and perceptions of cash economy activity in the building and construction sector in Australia. In 2012-13, the ATO introduced the Taxable Payment Reporting System which yielded an additional compliance dividend. By comparing responses of builders before and after the introduction of this reporting system, we evaluate the impact of this regulatory change on grassroots activity in the cash economy. Although this regulatory change has impacted on certain cash economy activities, more targeted strategies are still required.

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THE IMPACT OF THE CHANGING TECHNOLOGY OF MOTOR VEHICLES ON ROAD TAX REVENUE

Abstract
This paper considers the impact on road tax revenue of changes in the technology of motor vehicles. As the drive trains of motor vehicles are transformed from internal combustion engines to electric motors, their energy sources may transition significantly from taxable fossilfueltonon-taxablerenewableenergy. Revenuefrommotorvehiclefuelexciseslevied on petroleum products and allocated to the construction and maintenance of Australia’s roadways will decrease accordingly. Therefore, to continue to fund the road transport infrastructure, governments will be obliged to change their focus about how road tax revenue is raised. This paper considers the current number of electric vehicles (EVs) on Australian roads and attempts to predict the future uptake of EVs by road users up to the year 2035. It looks at the likely impact of reduced road tax revenue from motor vehicle fuel excises on future contributions by the Australian government for the construction and maintenance of Australian roadways. To that end, the paper examines data published by the Australian Bureau of Statistics (ABS) and statistics from the Australian Taxation Office (ATO). It also refers to sales data provided by motor vehicle manufacturers. It then compares the results of those examinations with data from a case study of a plug-in hybrid electric vehicle (PHEV) owned and operated by a solar project in rural Western Australia. The paper concludes that future revenue from fuel excises may decrease as a consequence of the introduction of EVs. However, as there has not been an official link between road tax revenue and road construction and maintenance expenditures since 1959, a reduction in road tax revenue will not necessarily affect funding for the construction and maintenance of Australian roadways.

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