Next month marks 25 years since the Goods and Services Tax (GST) was introduced – and an RMIT expert argues that it’s time the system was reformed.
According to Dr Venkat Narayanan of RMIT’s Accounting, Information Systems and Supply Chain department, the GST is one of the most important taxes in Australia and yet it’s the one that no one, “especially politicians”, wants to talk about reforming.
“This needs to change, given our over-reliance on income taxes,” he says.
“The GST is one of the most effective ways to tax those on higher incomes, but it affects lower income earners more. We need to look at ways to make compliance easier for taxpayers and put more effort into making sure that everyone pays their fair share.
“The GST is currently at 10% – there is no reason why we shouldn’t be talking about increasing this gradually and over a period of time. Why not talk about a 10.5% GST for the next few years and increase it by 0.5% until we get to 15%, rather than just straight to a higher percentage?
“Any reform should consider income taxation, which we currently rely too heavily on, so that any increases to the GST don’t disproportionately affect low-income earners.”
