Core Viewpoint - CPA Australia expresses concerns over the Productivity Commission's recommendation to implement a cashflow tax (CFT), arguing it would complicate the tax system, increase compliance costs, and negatively impact productivity and consumer costs [1][5]. Tax Structure and Implications - The proposed CFT would tax companies based on their net cash flow instead of profits, allowing full deductibility of all outlays, including investments [2]. - The introduction of the CFT would create a complex hybrid tax model, conflicting with the government's goal of simplifying regulations [2][3]. Compliance and Economic Impact - The complexity of the CFT is expected to raise compliance costs and administrative burdens, making the tax system more difficult for businesses to navigate [3]. - CPA Australia believes that the new tax structure would increase the overall tax burden on some of Australia's most productive businesses [3][5]. Corporate Tax Rates - Currently, Australia's corporate tax rate is 30%, one of the highest among developed economies, with the new proposal aiming to raise it to an effective rate of 33% while reducing dividend imputation credits [4]. - Higher tax rates for large corporations may seem beneficial in the short term but could lead to increased costs for consumers and businesses over time [4][5]. Overall Economic Consequences - The additional complexity and higher taxes could deter investors and potentially drive capital offshore, weakening the economy [5]. - CPA Australia advocates for comprehensive tax reform centered around the GST rather than the proposed CFT, viewing it as a detrimental tax grab with serious economic consequences [6].