Australian business would welcome tax reform

Updated April 22, 2008 22:49:39

Prime Minister Rudd says the Australian taxation system requires comprehensive reform. [AAP]

Australian business groups have welcomed comments by Prime Minister Kevin Rudd suggesting he will take up one of the ideas from last weekend's 2020 Summit and embark on a major review of the national taxation system.

Chamber of Commerce and Industry (CCI) spokesman Peter Anderson says he welcomes the possibility of a taxation overhaul.

"Provided it goes to questions that deal with our international tax competitiveness, our capital gains tax and the interaction between our national economy and some of our outdated state taxes such as payroll tax, [it] will be welcome," Mr Anderson said.

Mr Rudd has promised to respond to ideas put forward at the 2020 Summit by the end of the year, but on Monday said there were merits in simplifying taxation.

"I actually think we are getting to that time where we need to have a top down look," he said.

Mr Rudd says there is a need for comprehensive reform and has criticised the previous government of John Howard for not acting on the issue.

"For the 11 years or 12 years that the Howard government was in office, the opportunity for a top down review of the entire taxation system was there," he said.

Some taxation experts have suggested the review could incorporate lifting Australia's goods and services tax from its current rate of 10 percent.

However that's strongly opposed by shadow treasurer, Malcolm Turnbull.

"About six weeks ago, we started putting together a comprehensive review of all of Australia's tax, but I can give you a commitment that there is no plan or no intention, no possibility of us recommending an increase to the GST," he said.

Mr Rudd says no changes will be made to the taxation system for at least two years.