A recent survey of 400-plus SMEs by cloud accounting provider MYOB shows that 53% of of the small business owners agreed with the Business Council of Australia that Australia’s company tax rate is globally uncompetitive and should be reduced immediately.
Simplifying the GST/BAS tax was likely to have a similar effect at 49%, the SMEs said.
“It was encouraging to see the government lower the company tax rate to 28.5% for businesses with an annual revenue of $2 million or under in last year’s budget. However, company tax affects businesses of all sizes,” said Tim Reed, CEO of MYOB.
“When we asked Australian SMEs what they would do with financial savings from a company tax rate cut, just under half (48%) of respondents said they would keep this money to increase their financial position and weather any future business challenges.”
Reed said this finding aligns with previous MYOB Business Monitor survey results.
This latest SME Snapshot also asked small businesses if they were investing in innovation.
While the vast majority of SMEs (85%) agreed that Australia needed to embrace innovation to deliver success, only 4% of those surveyed admitted to investing a set dollar amount towards innovation.
“We are seeing that Australian SMEs are struggling to invest in innovation. However, knowing that 36% of business owners would use a cut in the company tax rate to invest more in their business is certainly encouraging,” Reed said.
“Australia needs its economic engine room firing on all cylinders, and having small and medium businesses invest more will go a long way to securing our prosperity.”