$10m limit only excludes 1.4% of companies while large company tax cut would be worth $11 billion pa

The Australia Institute has calculated that denying tax cuts to those companies with revenue over $10 million would exclude only 1.4 percent of companies.

Despite making up only 1.4% of companies, the $10 million+ group account for 78 percent of company tax collections and would therefore take the lion’s share of the benefit from the Coalitions original plan.

Table: Companies by turnover in Australia 

   

Number of companies

Net tax

 
 

Turnover range

Number of companies

% of total

$million

% of total

Taxable

         

medium

$10-100 million

10,828

1.2

8,189

12.2

large

$100-250 million

842

0.1

3,144

4.7

very large

$250 million plus

668

0.1

39,633

59.3

Non-taxable

       

medium

$10-100 million

4,293

0.5

-1

0.0

large

$100-250 million

393

0.0

-7

0.0

very large

$250 million plus

368

0.0

-6

0.0

Source: ATO Taxation Statistics, 2013-14. 

“There is simply not the evidence – internationally or domestically that company tax cuts are a cost effective method of delivering growth and prosperity,” said Ben Oquist, Executive Director of The Australia Insitute.

“If the large company tax cuts were implemented today they would be worth a staggering $11 billion per annum.

“These tax cuts represent the same kind of fiscal recklessness as delivered by Costello’s tax cuts. They are slow to start but ramp up over time with devastating  long term effect on revenue.

“The combined salaries of the seven CEOs spruiking for company tax cuts at Parliament House yesterday is more than $65 million. The tax cut they asked for would be worth $1.6 billion per year to their seven companies alone.

“The opportunity cost resulting from these tax cuts will be enormous. Future health, education, government services, infrastructure and industry assistance spending will be in jeopardy if the Senate agrees to pass the Government’s legislation.”

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