Extending the Tax Expenditure Concept in Australia
26 Pages Posted: 30 Jul 2018
Date Written: January 5, 2018
Abstract
A tax expenditure is a departure from a defined benchmark taxation system. For the purposes of this article, the definition of the benchmark taxation system adopted by the Australian Treasury is accepted. This article therefore focuses on the basis for identifying departures from that benchmark. It is argued that the Australian Treasury has adopted a narrow basis for identifying departures from its benchmark by focusing upon the form in which tax expenditures arise. The author argues that this concentration upon the form of tax expenditures is inconsistent with the substance orientation of the tax expenditure literature. From this standpoint, it is argued that Australian tax expenditure reporting should recognize a broader range of departures from the benchmark taxation system.
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