An inquiry report into Australia’s taxation system considered submissions and evidence on various aspects of Australia’s taxation system, including critiques of the current tax system and proposals for reform.

The inquiry had particular reference to:

a. the social and economic impact of taxing people who earn less than the cost of living
b. assumptions used by Treasury in modelling income tax cuts
c. the tax arbitrage between onshore and offshore profits that encourage domestic profits to be transferred offshore rather than retained in Australia
d. the tax arbitrage between onshore and offshore profits that puts companies domiciled in Australia at a competitive disadvantage to companies domiciled offshore
e. the abolition of numerous tax loopholes that favour special interest groups, in particular foreign interests
f. the actual net company tax rate after franking credits have been refunded
g. the cost of recycling franking credits to and from Canberra
h. whether capital gains tax concessions for passive investment cause a misallocation of capital into the non-productive economy which has to be offset by higher taxes on active income which drives down productivity and the velocity of money
i. related matters.

The committee noted that the last comprehensive review of the tax system, undertaken by Dr Ken Henry, was completed in 2010.