Govt to undo tax changes
The Federal Government has moved to undo some of the measures implemented by the former Howard Government with respect to changes to the consolidate tax cost setting rules to clear the way for scrip for scrip transactions.
The Treasury has been asked to consult with the private sector on how to best resolve the situation.
The minister for competition policy and consumer affairs, Chris Bowen said the Government had decided to move in response to industry concerns at the effect of the Howard Government’s changes on capital gains tax roll-overs.
He said the Howard Government’s announcement had caused significant disruption to the operation of Australia’s capital markets and had effectively prevented any new scrip for scrip transactions.
“It is quite clear that there was insufficient consultation with the private sector by the previous Government in relation to this decision,” Bowen said. “This situation is quite urgent, it is necessary that this consultation be conducted expeditiously and be completed by mid-February,” the minister said.
Bowen said it was necessary to ensure that whatever changes occurred protected public revenue while not having the unintended consequence of hindering the operation of scrip for scrip transactions.
“Accordingly I have asked that the consultation focus on ensuring non-contrived takeovers involving an exchange of scrip are not affected by the changes,” he said.
AUTHOR
Mike Taylor
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