The Henry tax review must streamline "unreasonably high" employment taxes to relieve the burden on privately-owned businesses, a consultant says.
The Henry tax review must streamline "unreasonably high" employment taxes to relieve the burden on privately-owned businesses, a consultant says.
A study by business consultant Grant Thornton found almost a third of business owners ranked employment-related taxes as the greatest burden on their businesses.
This compared with 18 per cent saying taxes on profits were the biggest hit on their business and 17 per cent pointing to personal income tax.
The survey of 250 companies found businesses in NSW, South Australia and Western Australia believe that staff-related taxes are twice as excessive as corporate taxes.
Grant Thornton's national head of taxation services Peter Godber said the survey results illustrated the strength of feeling around the volume and complexity of employment taxation in Australia.
"These findings send a clear signal to policymakers involved in the Henry tax review," he said.
"The cost of employment for businesses in Australia is unreasonably high, and there's a real need to streamline the system to lighten the load on Australia's entrepreneurs and incentivise employers."
Treasury Secretary Ken Henry has been tasked with reviewing taxes on work, investment, property, savings and consumption and their impact on individuals, families and retirees, and is due to report back to the federal government next year.
Mr Godber had expected business owners would be most concerned about taxes directly imposed on them - paying once on their company profits and again on the dividends they receive as an individual.
"However, this research shows that they're more concerned by their multiple exposure to employment taxes - from paying the state for employing someone, right through to dealing with ambiguous areas like fringe benefits."
The report was part of a wider international survey covering 7,800 respondents across 34 countries.
It found Australian respondents put a higher emphasis on employment-related taxes than many of their international counterparts.
"Whilst global respondents were equally downbeat about employment taxes and business profits - each taxation area receiving 24 per cent of votes - Australian companies reserved their firepower for payments like payroll tax, workers comp and employment on-costs," Mr Godber said.