Australia's high company tax rate and dividend imputation

Crawford School of Public Policy | Arndt-Corden Department of Economics

Event details

ACDE Seminar

Date & time

Tuesday 17 April 2018


Coombs Seminar Room B, Coombs Building 9, Fellows Road, ANU


Chris Murphy, Crawford School of Public Policy, ANU.

By international standards, Australia’s business tax system combines a high company tax rate of 30 per cent with low taxation of domestic investors through dividend imputation. This prioritising of domestic investors over foreign investors discourages business investment because the evidence indicates that Australia is a small open economy where the marginal investor is foreign. Better aligning Australia’s business tax system with international practice would encourage business investment, reduce tax avoidance by multinational corporations and reduce the riskiness of national income.

This paper assesses the evidence on the size of these three effects and models the consumer benefits of better aligning the Australian business tax system with international practice.

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