Higher GST proposed to shift tax focus from incomes
4:00AM Tuesday Aug 18, 2009
By Brian Fallow

Raising the rate of GST could increase the economy's efficiency if it was used to shift the mix of taxes away from income tax, a working group reviewing the tax system says.

The panel comprises private-sector tax specialists, academics and Government officials.

An officials' briefing paper issued yesterday said lifting GST to 15 per cent would raise an extra $2.1 billion a year. That would rise to $6.2 billion if the tax was set at 20 per cent.

The working group believes it should not be increased to fund additional spending but only as part of a revenue-neutral package of tax reform. It accepts there may be fairness issues, although it says GST is less regressive than generally believed, especially if measured over a lifetime.

More here.