February 10th, 2020
The Australian newspaper has highlighted a speech to the Australian Computer Society on Friday made by Liberal Senator Andrew Bragg, who is chairing a committee examining Australia’s fintech sector.
The article noted that:
- The government is mulling a number of policy shifts to make life easier for start-ups;
- Senator Bragg is quoted as saying:
- “FinTech Australia tells us the R&D tax incentive is the number one regulatory issue for fintechs. They tell us the importance of the R&D tax incentive to the industry cannot be underestimated, as evidenced by the large number of FinTechs which have successfully applied or are in the process of doing so;
- Further, they say 76 per cent of fintechs indicate the R&D incentive helps keep aspects of their business on shore. Understandably they argue the rate of corporate tax in Australia is high, particularly when compared with other countries, such as Singapore which has a corporate tax rate of 17 per cent
Whilst and favourable change to the R&D Tax Incentives to assist Fintech’s can be commended, the timing of the speech is curious. Only recently (December 2019), the government reintroduced its R&D Tax Reform bill, proposing several budget saving measures to the R&D Tax Incentive programme, including:
- Reductions to the rate of R&D Tax Offsets, including caps for very large Refundable R&D Offsets;
- Significant reductions and complexity to the calculation of Non-Refundable R&D Offsets.
Industry bodies and leading companies including StartupAUS, The Small Business Ombudsman, CSL and Cochlear and consisitly lobbied the government in recent years to maintain stability of the R&D Tax Incentive, which has been subject to many proposed and actual changes in law and administration since its introduction in 2012.