COSBOA calls on policymakers to slash SME company tax rate

The Council of Small Business Organisations Australia (COSBOA) is calling on policymakers to slash the tax rate for small businesses with an annual turnover of $20 million or less from 25 per cent to 20 per cent.

A cut in the tax rate would provide “instant relief” to small businesses who continue to struggle in the current economic climate and shifting political landscape.

Luke Achterstraat, chief executive, said small businesses were bearing the brunt of the cost-of-living crisis and suffocating red tape.

Achterstraat added that COSBOA would push for the tax cut as national insights from independent pollster showed 69 per cent of voters and 76 per cent of voters in marginal seats revealed a cut would provide “much needed relief.”

“Small businesses are the engine room of the Australian economy and part of our social fabric. They are local cafes, where we catch up with friends. They are farming families that grow our food. They are the baker who is up at 3am every day to bake our bread. And behind every small business is a family, their staff and their customers,” he said.

“But small businesses are doing it tough. Like their customers, they’re bearing the brunt of the cost-of-living crisis, red tape is increasing, and staff are getting harder to find. Our research shows that without urgent change, 50 per cent of small businesses are worried about surviving.”

The tax cut would be welcomed by the wider business community as small businesses make up 97.7 per cent of all Australian businesses, employ more than 5.1 million people and contribute $500 billion a year to the economy.

In regional areas, small businesses are relied on even more by the community which often adds to the building pressure business owners felt to perform well for their customers, even in a tough regulatory and economic environment.

Achterstraat said this was why COSBOA was calling for “sensible changes” to enable small businesses to keep prices stable, employ more staff and invest in innovation so they can compete with huge multinationals.

“Cutting the tax rate would have an instant impact and provide Australian small businesses with the fair go they deserve. This tax cut would provide instant respite to Australian small businesses and let them focus on what they do best – running their businesses and serving our communities.”

“Investment growth has been lacklustre in Australia, leading to reduced competition, higher prices and lower living standards. RBA research confirms lower tax driver for new investment.”

“With this simple, sensible change Australian small businesses will be primed to thrive now and into the future, better able to contribute to the economy and their communities.”