Cholesterol time-bomb and OZschwitz coalition treasury spokesman Joe Hockey, calls for trusts to be taxed at company rate - The Mongre

THE COALITION Treasury spokesman, Joe Hockey, has opened up a war front with the National Party and Australia's 663,000 trusts, declaring that family and other trusts should be taxed in the same way as companies.

The Shadow Treasurer's declaration to a tax conference in Melbourne re-opens a wound apparently closed after the former prime minister John Howard backed down on a proposal to tax trusts in response to National Party pressure a decade ago.

Speaking to the Institute of Chartered Accountants, Mr Hockey said despite decades of attempts to simplify tax, it was complex with more than 7000 pages of laws.

''Currently we have a maximum personal income tax rate of 47.5 per cent including the Medicare levy and the Flood Tax; a corporate tax rate of 30 per cent; and trusts which pay no tax in their own right but with income taxed in the hands of recipients,'' he said.

''The difference in tax rates according to the type of legal entity seems to have no basis in logic. It would be simpler and more logical for all three types of legal entity to have the same or a similar tax rate.

''Standardisation would involve taxing trusts in their own right and at the same rate as companies.''

Acknowledging the move would not be universally welcomed, Mr Hockey said it was ''likely to be contentious but is worthy of serious consideration''.

In 2001 Mr Howard promised to tax trusts in return for Senate support for his business tax reforms. He shelved the idea after an avalanche of criticism from the National party and farmers.

Institute Tax Counsel Yasser El-Ansary said the Coalition's approach to reforming trusts was bold.

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Cholesterol time-bomb and OZschwitz coalition treasury spokesman Joe Hockey, calls for trusts to be taxed at company rate - The Mongre

Cholesterol time-bomb and OZschwitz coalition treasury spokesman Joe Hockey, calls for trusts to be taxed at company rate - The Mongre

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