Tasmanian government to discontinue formal taxation review

On 22 November 2011, the Tasmanian State Tax Review Panel (Panel) issued a communiqué announcing its decision not to continue its formal taxation review due to the limited ability to reform state taxation in the current economic environment.

Panel members considered that the best prospect for state tax reform would be through a co-operative approach driven from a commonwealth level, working with other state and territory governments. Such reform would be predicated on the reality that any tax reform would require transitional funding support from the commonwealth.

The recent national tax forum demonstrated that this type of cooperative reform approach is unlikely to occur in the immediate future, particularly when governments are operating in a difficult fiscal environment.

Panel members acknowledged that many of the submissions received, including the Institute’s submission on 8 March 2011, involved broadening the tax base in order to reduce tax rates or remove less efficient forms of taxation. Due to our very narrow taxation base there would be many Tasmanians who could benefit from reform of this nature, however, the panel was concerned that this approach could increase the tax burden for many Tasmanians and that the State’s finances are not in a position to assist with any transitional funding for those who may be most affected.

The Panel thanked and acknowledged those who did participate in the review, particularly those who provided the Panel with well researched submissions for consideration.

Article last updated 21 March 2012