A Dual Income Tax System for Australian Small Business: The Experts’ Verdict

Australian Tax Review, 47(1): 54-78

25 Pages Posted: 25 Jul 2018

See all articles by Barbara Trad

Barbara Trad

Griffith University

Brett Freudenberg

Griffith University - Griffith Business School; Griffith University - Griffith Law School

Date Written: July 4, 2018


Small businesses are a critical part of the Australian economy, and over the years a number of tax reforms have been implemented to try to assist them. A potential reform mooted has been for the introduction of a dual income tax (DIT) system. Pitcher Partners (an Australian accounting firm) proposed such a DIT system should be introduced for closely held companies. It would appear that a DIT system could be beneficial, as it has been implemented in a number of Nordic countries. This article reports on a study of Australian industry and government experts’ opinions as to whether the touted benefits of a DIT are likely to be realised by Australian small businesses. Overall, while there could be some possible benefits, concerns were raised about required integrity provisions that could adversely drive up compliance costs, as well as the need for extensive education programs for both advisors and small business operators.

Keywords: Small Business, DIT, Dual Income Tax, Reform, Australia, Tax

JEL Classification: K34, L51, H25, H21

Suggested Citation

Trad, Barbara and Freudenberg, Brett, A Dual Income Tax System for Australian Small Business: The Experts’ Verdict (July 4, 2018). Australian Tax Review, 47(1): 54-78, Available at SSRN: https://ssrn.com/abstract=3208455

Barbara Trad

Griffith University ( email )

Brett Freudenberg (Contact Author)

Griffith University - Griffith Business School ( email )

Brisbane, Queensland 4111

Griffith University - Griffith Law School ( email )

Nathan Campus, GU
Nathan 4111

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