CANBERRA, Aug. 1 (Xinhua) -- A review commissioned by the Australian government has recommended cutting tax rate for small- and medium-sized businesses to boost productivity.
The Productivity Commission (PC), the government's principal review and advisory body on economic, social and environmental issues, said in a report that the tax rate should be cut to 20 percent for all businesses with revenue of up to 1 billion Australian dollars (643 million U.S. dollars).
The report was the result of the first of five inquiries that Treasurer Jim Chalmers commissioned the PC to undertake to identify priority reforms that could boost productivity.
It said that cutting the tax rate for small- and medium-sized businesses would lift business investment and productivity growth.
The current tax rate is set at 25 percent for companies with revenue under 50 million Australian dollars and at 30 percent for those with turnover exceeding 50 million Australian dollars.
Under the PC proposal, the tax rate would remain at 30 percent for firms earning over 1 billion Australian dollars.
It also called for a new 5-percent tax on net cash flow rather than profits, which would increase tax burden for some large companies and help make the proposed cuts revenue neutral.
According to the PC, the measures would increase Australia's gross domestic product by 14 billion Australian dollars with no net cost to the federal budget over the medium term. (1 Australian dollar equals 0.64 U.S. dollars) ■