The Federal Government has engaged in a formal process to consider the future of the Australian taxation system and has invited submissions by 1 June to inform the Green (options) Paper, due to be published later this year, and the White Paper next year.
In a 196-page discussion paper to frame responses, the Government has posed 66 questions for discussion and said that it will “focus on ideas rather than prescribing solutions…how revenue is raised, not just how much… and rule nothing in or out.”
The recently launched Biotechnology Industry Position Survey 2015 (supported by roundtable discussions) demonstrated that the industry’s CEOs are passionate about the benefit that the industry could add to Australia’s economy and want to keep and grow their companies in Australia, but tax reform was a major issue. The Research and Development (R&D) Tax Incentive was repeatedly cited as the only positive policy for biotechs, which was enabling reinvestment into research programs and bolstering clinical trial activity.
In an open question in what public policy issue most concerns companies at a Federal level, un-prompted, 19 out of 49 companies said tax. Company CEOs were concerned about possible tampering with the much-loved R&D Tax Incentive and keen to develop a patent box tax incentive for Australia.
The AusBiotech draft submission makes the case for tax settings to support Australia’s innovation ecosystem in order for innovative industries, including biotechnology, to underpin the economy as the mining boom fades. Preserving the R&D Tax Incentive in-tact is key and ought to be complemented with preferential tax treatment of profit from locally-developed and worked intellectual property (IP), via the Australian Innovation & Manufacturing (AIM) Incentive, to incentivise the retention of economic benefits from innovation on-shore. This submission also argues for the introduction of fiscal incentives for investors in pre-revenue and start-up companies, to encourage ‘patient’ venture capital; and further tweaks to Employee Share Schemes (ESS) to meet the policy intent of recent repairs.
Members are invited to contribute comment on the AusBiotech submission by 12.00 noon Friday 29 May via Lorraine Chiroiu (lchiroiu@ausbiotech.org, 03 9828 1400). AusBiotech’ draft submission can be downloaded here.
To view the full Discussion Paper or for more information visit the ‘better tax’ website at: www.bettertax.gov.au.