IT&T industry welcomes 'Review of Business Taxation'

The IT&T Industry has welcomed reforms to the Australian capital gains tax (CGT) system contained in the federal government's response to the Ralph Report.

The government released its response yesterday to the report, 'Review of Business Taxation'.

The report contains provisions to reduce the CGT rate, setting a maximum CGT of 24.25 per cent, and it also sets out a general reduction in the corporate tax rate.

In addition, it contains tax exemptions for foreign investment funds investing in Australian companies.

Peter Upton, executive director, Australian Information Industry Association (AIIA), commented: "AIIA believes that a competitive capital gains tax regime will stimulate the venture capital market and facilitate much needed foreign investment.

"This will make Australia a more attractive location for global-scale investment in IT&T production facilities. The lower corporate tax rate will also create a more competitive environment for business in Australia."

According to Craig Lawn, partner, PricewaterhouseCoopers, the review will have an overall positive impact on the IT&T industry, "albeit indirect. There's nothing specifically targeted at the (IT&T) industry", he said.

Lawn added that it was a disappointment that the review did not tackle research and development taxation issues.

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