Queensland proposes harmonised payroll tax system

Queensland Government proposes a national payroll tax system to reduce compliance costs and improve business productivity

October 5, 2011

The Queensland Government has propsoed switching to a national payroll tax system, but the states and territories will still have the power to go their own way under the plan.

Queensland Treasurer Andrew Fraser used his involvement at the two-day Tax Forum in Canberra to call for a single payroll tax system for the eight state and territory jurisdictions by July 1, 2014.

Fraser proposed one piece of uniform template legislation that could be adopted across the country.However, he specified that individual states and territories should still have the ability to set their own rates and thresholds to maintain their competitiveness.

"The harmonisation of payroll tax could lead to reduced compliance costs and increased efficiencies, improving productivity for business," Fraser says.

"In a nation this size, we need to recognise having eight different regimes is a matter of history - not grand design."

Fraser also proposed a review of regional tax offsets, which won the support of Western Australia Treasurer Christian Porter.

"It's time that our antiquated system of zonal tax offsets - unchanged in some respects since 1956- was overhauled," Fraser says.

"We need to incentivise the mobility of our workforce into regional areas, and increasing tax offsets is one of the ways we can do that."

Fraser says he anticipates Queensland’s reform proposals will be taken further at Treasurers Council meetings.

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