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Tax reforms a boon to our financial centre ambitions

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The M inister for Financial Services & Regulation, Joe Hockey today said the Governm ent's N ew Business Tax System package sent a strong signal to the international financial community that Australia w as serious about becoming a global Financial Centre.

The HON. Joe Hockey MP

Minister for Financial Services & Regulation

Parliament House, Canberra ACT 2600 Australia

"Reducing the corporate tax rate is an enorm ously positive step and makes Australia even m ore internationally competitive. O ur rate is now lower than the US and equal to the United Kingdom and Germany," the M inister said.

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"Combined w ith our other G overnm ent initiatives, our business tax reform s m ake us an extremely cost-effective venue for financial services activity across the Asia timezone.

"Reforming the w ay capital gains are taxed removes im pedim ents to efficient asset m anagem ent, im proves capital mobility and makes Australia's capital gains tax internationally competitive."

M easures crucial to securing Australia's future as a financial centre are: • Lowering the com pany tax rate from 36 per cent to 30 per cent from 1 January 2001. • Reforming capital gains tax so that individuals and super funds pay no m ore than 24.5 per cent and 10 per cent tax, respectively. • Encouraging venture capital investm ent by allowing non-resident tax-exem pt pension funds,

such as those in the US, to be exem pt from capital gains tax involving venture capital investments.

"The N ew Business Tax System builds on recent changes to interest w ithholding tax exem ptions on corporate bonds, offshore banking units (OBUs), foreign investm ent fund m easures and thin capitalisation rules w hich passed through the Australian Parliam ent in June.

"Australia will now have a globally competitive tax system to m atch our world-class regulatory regime, our outstanding ΓΓ infrastructure, our highly skilled workforce and our deep, liquid and sophisticated financial markets."

The Review of Business Taxation w eb site is:

21 September 1999 44/99

Media contact: Matthew Abbott, Minister's office, 0413 076 213 The Minister's media releases and speeches are available on