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The indirect tax system



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TREASURES

EMBARGO IMMEDIATE RELEASE

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP

THE INDIRECT TAX SYSTEM

The Treasurer, the Hon. John Howard, M.P., said today

that the Government was examining the Commonwealth system

of indirect taxation.

The Government has authorised the Commissioner of Taxation

to initiate discussions between officials of the Taxation

Office and various business and industry groups. Mr Howard

said that the information gained through these discussions

will be essential to the Government's overall examination of

the system.

In making the announcement, the Treasurer drew particular .

attention to the Government's objectives for the Australian

taxation system. He recalled that, within the framework of

consistent application of expenditure restraint, the Government

had already moved to substantially lighten the burden of

personal income tax by the introduction of annual indexation

and the reforms introduced in February.

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The Treasurer stressed that in undertaking this investigation

the Government was not seeking to increase the overall burden

of taxation. Rather, the Government was seeking, through such

a review, to investigate the incidence of and equity of .

the present burden of taxation. .

Against that background, the Government was considering

all .aspects of the indirect tax arrangements, including the

implications of changes to the system. Possibilities for

changes in indirect taxation arrangements included a value

added tax or an administratively simpler tax imposed only at

the retail level. The investigation now to be pursued by

the Commission would be directed to the practical aspects

of, an indirect tax collected at the retail level.

Mr Howard noted that it is anticipated that the investigation

could take some months to complete. ยท

Should the Government, after the review decide to propose,

that a new broad-based indirect tax be introduced the

Government would, Mr Hov/ard said, publish a paper outlining

the proposed scheme of taxation for public, consideration and

comment. , .

30 June, 1978