Impact of Reduction in Australian Corporate Tax Rate on Dividend Imputation and Tax Payers

Running head: ACCOUNTING AND FINANCE
Accounting and Finance
Name of the Student:
Name of the University:
Authors Note:

ACCOUNTING AND FINANCE
1
Introduction:
The assessment aims in evaluating the impact of reduction in Australian corporate tax
rate could have on Australian dividend imputation and Australian tax payers. The relevant
significance of the reduction in Australiana corporate tax rate is adequately depicted, which
might allow the organisations to increase their competitiveness in the global market. The
limitations of the decisions are also highlighted, which might negatively affect operations of
the organisations.
The decline in corporate tax rate have both benefits and limitations, which can affect
the revenue generation capability of the Australian government. The question of reducing the
Austrian tax rate was mainly instigated after the reduction in their tax rate made by the
Donald Trump Administration in US. This reduction in the current tax rate, which has been
implemented by major countries all around the world directly highlighted the question where
the Australian organisation are able to compete in global market. Moreover, seeing the
changes conducted by major developed countries Australian authorities have decided to
reduce the corporate tax rate to the levels of 25%. The decision has not been made as it is
been argued by the Australian authorities whether to reduce the corporate tax rate
(Abc.net.au, 2017).
However, the reduction in corporate tax rate would only benefit the current
organisation, which has been operating in Australia. In addition, the economy is mainly based
on mining industries, which is located within the country and produce the largest revenue as
tax to the Australian government. Hence, reduction in the taxes would directly result in the
decline in its revenue collection, which will affect government capability to support its other
financial obligations. Hence, the reduction in corporate tax rate would negatively affect tax
revenue of the government and hamper the care, which is given by the Australian government