Income shifting consultation: an open letter to the financial secretary to the Treasury

Dear Ms Kennedy

We wish to register our extreme disappointment with the quality of the income shifting document and the proposals to deal with this perceived problem in isolation rather than through a wholesale review of the taxation of small businesses.

The result seems to be a proposal that far from solving problems will unleash enormous administrative burdens for thousands of family businesses that Government has previously sought to encourage purely to enable them to justify with any degree of certainty the stance they have taken regarding income allocation.

We do not dispute that the position of small business tax is unsatisfactory and in need of reform. But we have consistently argued for a proper thorough review.

At the moment the same level of economic activity can give widely different tax outcomes depending on the legal structure that has been adopted. These proposals will...