AusBiotech urges Business Tax Working Group to leave R&D Tax Incentive intact

AusBiotech has made a submission to Treasury’s Business Tax Working Group (BTWG) in response to its recent discussion paper suggesting that the 40% offset of the newly implemented R&D Tax Incentive be targeted for removal or reduction.

Treasury’s Business Tax Working Group consultation paper has proposed four options to remove or limit the 40% offset of the R&D Tax Incentive to companies with turnover over $20 million to save an estimated $0.45 billion to $2.22 billion.

The BTWG has been asked by Treasury to identify offsetting savings from within the business tax system or business expenditure programs to fund a cut in the corporate tax rate. More specifically, the group has been asked to make revenue-neutral reforms. The sought-after cut in the corporate tax from 30 per cent to 25 per cent would cost $26 billion over the next four years according to Treasury costings.

AusBiotech is opposed to cutting a program that was initially implemented to support innovation in Australia and to encourage the spill-over benefits that investment in R&D bring to the economy.

The introduction of the R&D Tax Incentive legislation was a momentous and pivotal inflection point for Australian innovation; the type we as a community will look back on in admiration and congratulate its architects’ foresight.

AusBiotech has urged the BTWG not to recommend any measure that will limit or remove the 40% offset, when it makes its report to Government.

You can read the AusBiotech submission here.