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Reports That Senate Economics Committee Inquiry Into R&D Tax Incentive Reform Bill Has Been Deferred
June 3rd, 2020
In December 2019, the government re-introduced a bill to reform the R&D Tax Incentive.
This bill was a slightly modified version of a previous reform bill (Treasury Laws Amendment (Making Sure Multinationals Pay Their Fair Share of Tax in Australia and Other Measures) Bill 2018), which did not pass through the Senate at that time. A Senate Economics Legislation Committee recommended in February 2019 that the initial bill should be deferred from consideration until further analysis of the bill’s impact is undertaken, particularly with respect to concerns around the proposed intensity threshold and refundable offset cap.
The Senate Economics Legislation Committee was again due to review the latest bill (containing changes proposed to apply for FY20) and report findings in April 2020.
InnovationAus has reported this week that the Committee is likely to now receive an extension and won’t report until the end of the year, due to disruptions from the COVID-19 situation.
This development would indicate that it is extremely unlikely that the reforms would apply for FY20 as originally proposed, as it would be unworkable to enact legislation so retrospectively.
Recent comments by Industry Minister Karen Andrews indicate that the government plans to push ahead with trying to enact the proposed reforms.
We call on the government to reconsider their position and withdraw their proposed R&D Tax Incentive reform bill altogether, given that:
- There has been widespread condemnation of the proposed reforms by industry;
- Australian businesses’ R&D investment was already in decline pre-COVID-19;
- Australian businesses face significant headwinds post-COVID-19, and the uncertainty of proposed changes to the R&D Tax Incentive would compound these challenges.
Source: Innovation Australia; Canberra Times
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