Half of SMEs would reinvest tax cut: MYOB Snapshot
- 53 per cent of SMEs would put company tax cut savings back into business
- 36 per cent of SMEs would use company tax cut savings to invest in expanding their business
- Only 4 per cent of SMEs are investing a set dollar amount in innovation
With the Business Council of Australia recently commenting that Australia's company tax rate is globally uncompetitive and should be reduced immediately, new research from MYOB echoes this sentiment revealing that over half (56 per cent) of small businesses agree that the company tax rate should be cut for Australia to remain globally competitive.
The latest SME Snapshot from MYOB has showed that 53 per cent of the 400+ SMEs surveyed were more likely to invest back into their business if the company tax rate was lowered.
Simplifying the GST/BAS tax was likely to have a similar effect at 49 per cent.
"It was encouraging to see the government lower the company tax rate to 28.5 per cent for businesses with an annual revenue of $2 million or under in last year's budget," said Tim Reed, CEO of MYOB.
"However, company tax affects businesses of all sizes. The current system discourages SMEs to grow beyond $2 million in revenue because they then lose many of the benefits of being a small business. These barriers to growth need to be removed."
"When we asked Australian SMEs what they would do with financial savings from a company tax rate cut, just under half (48 per cent) of respondents said they would keep this money to increase their financial position and weather any future business challenges."
This finding aligns with previous MYOB Business Monitor survey results.
This month's SME Snapshot also asked small businesses if they were investing in innovation. While the vast majority of SMEs (85 per cent) agreed that Australia needed to embrace innovation to deliver success, only 4 per cent of those surveyed admitted to investing a set dollar amount towards innovation.
"We are seeing that Australian SMEs are struggling to invest in innovation. However, knowing that 36% of business owners would use a cut in the company tax rate to invest more in their business is certainly encouraging," said Mr Reed