Tax Reform

PwC position paper - The case for dividend imputation in Australia

This paper presents PwC’s view regarding the case for the dividend imputation system within the current Australian income tax system. This view is founded upon the role paid by dividend imputation and its context within the income tax system.

The dividend imputation system is an essential element of the income tax system and the Australian economic frame work. The benefits of dividend imputation include:

  • the elimination of double taxation on company profits
  • neutrality in the treatment of businesses conducted by incorporated and unincorporated entities
  • encouragement for corporate tax compliance and the payment of corporate taxes
  • a stable capital market and a lower cost of capital for domestic firms.
View the PwC position paper.

PwC believes there is a clear need for comprehensive tax reform - done the right way. The 'right way' means increasing those taxes that have the least effect on investment and employment, and at the same time reducing reliance on taxes that distort incentives to work, invest and transact business. It also means addressing those factors which increase the complexity of the tax system and the cost of compliance.

This is an issue that will not go away. As part of a broader community discussion about the challenges Australia faces, we need an informed and intelligent conversation on tax. Leaders of civil society, business, unions and the public policy community must drive this conversation if we are to realise the benefits across all parts of society. The overall objective is twofold: economic growth, and enhancing the well-being of the Australian public.

Australia's tax system: an infographic

Australia's Tax System: an infographicExpand
 

Tax reform: why you should care