The whole tax system is far too complicated for the average person to understand it and, consequently, to respect it. It has obviously been cobbled together by accountants for accountants.
A brodly based consumer tax is obviously the way to go with a simple PAYE systen so that on one hand the wage earner understands his earning deductions and at the same time can make decisions regarding the GST at point and time of sale.
The Company Tax regime needs a complete revamp because of international trade and multinationals' ability to shift profits to lower tax havens. There is no way that the ATO can nail multinationals with transfer pricing because these companies have complex international supply and distributions networks. I have worked with 4 multinationals during my work career and three things became evident: (a) The tax section of accounts had abnormal numbers of international tax experts (b) the companies rarely declared profits in Australia. (c) Their balance sheets and tax details were not available for public scrutiny unlike their competitor ASX listed companies.
For these companies a flat turnover tax would be more effective. It seems ridiculous for a multinational company turning over in excess of $8 billion a year to declare a profit before tax of less than $50 million a year in Australia and to be still here 20 years later. Its a joke and the ATO are more inclined and interested in auditing an individual with earnings of less than $40K a year than a multinational with less 1% of turnover in pretax profit.
Company tax is compounded by GST; that is the company has to pay 10% GST on domestic sales and then claim a credit for taxable inputs and then pay 30% company tax on remaining profit. For those with big profit margins there is a high reward for 'minimising tax"
The GST has bred a black cash trade which is hard to detect and costs the treasury billions annually.
All of this leads to parliamentary churning of tax laws, updating accountants and confusing the public and making the ATO's job very difficult.
With progressively more foreign owned companies in Australia then perhaps a company flat tax of say 10% on turnover would yield better results than 30% of bugger all. As such the sales and marketing divisions of multinationals could get on with their job of selling rather than referring sales contracts to the in-house tax accounting department for "styling" before signatures. Cheers Moorookamick
