Related ArticlesShift stamp duty into other taxes, says WA
insuranceNEWS.com.au, 15 June 2009
The WA Government says higher rates for GST or income tax could offset the removal of insurance duty and other inefficient state taxes.
In its submission to the Henry Review of Australia’s future taxation system, WA says both motor vehicle stamp duty and insurance stamp duty could be absorbed into a higher GST rate, reflecting that both motor vehicle transactions (excluding private sales) and insurance premiums are already subject to GST.
The state currently levies a 10% duty on general insurance – after applying 10% GST to the cost of the premium.
However, it acknowledges that the GST rate and base have been ruled “out of scope” by the Federal Government in the review and that any absorption of duties into it would lessen state autonomy.
“Absorption of these duties into a higher state PAYG or personal income tax surcharge could be an alternative,” the Government says in its submission.
“Again, however, while this could be achieved at no net additional cost to taxpayers in aggregate, modelling of the redistributional impacts would be needed.”