Modelling undertaken by Tulipwood Economics on behalf of the Council of Small Business Organisations of Australia suggests that reducing the sector’s tax take could significantly boost economic activity.
The modelling claims that reducing the tax rate for small businesses from 25% to 20% could increase GDP by between $5.2 billion and $11 billion over the forward estimates period.
Tulipwood Economic’s public policy economist Joe Branigan claims the reduction in tax revenue from cutting the small business tax rate would be “almost fully clawed back” over the five year modelling horizon.
