'Which lever do we pull' on GST?
Grant Thornton partners have addressed attendees at the IPA National Congress on the intricacies and complexities of GST reform.
Speaking at the 2015 IPA National Congress on the Gold Coast, Grant Thornton partner and national head of indirect tax Tony Windle noted that many 'tinkers' have been made to the current GST in an attempt to maintain relevance.
Mr Windle made particular reference to the 'Netflix tax', which is a tax imposed on companies based overseas that are providing digital products and services in an attempt to keep up with the times without changing the tax rate itself.
"What this tax is doing is trying to expand the taxing rights of the GST," Mr Windle said.
Mr Windle added that there is still much confusion in political and economic circles as to whether a base expansion or a rate rise constitutes the ideal solution.
"Which lever do we actually pull here?" he asked.
In addition to a split consensus on the ideal solution, Mr Windle noted that Australia has almost been designed to fail in regards to GST reform.
"Ultimately the landscape that we operate within Australia is almost designed to fail around GST reform itself. For the states to have their own mantra and their own motivations as to what they want to do, that's going to be difficult."
According to Mr Windle, the majority of the tax debate that has taken place has ignored the concept of input taxation, which sits firmly in the middle of base and rate raising.
Mr Windle concluded by stating that simply shifting education and health from GST-free status to taxable would not immediately solve the problems for taxpayers and the system as a whole, and that any reform should span further than the GST in isolation.