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Edited by Nelly Tawil
On Monday NSW Treasurer Gladys Berejiklian announced mortgage duty, share transfer duty and non-real transfer duty, worth up to $1.8 billion over the forward estimates, will be scrapped when the budget is delivered on June 21.
“This is a decision we’ve been able to take because we’re a responsible government,” she said.
“By supporting business we’re supporting jobs, we’re supporting economic growth.
The business mortgage duty hit more than 200,000 businesses in NSW last financial year. On average, a business paid $1000 on mortgage duty.
Sydney Business Chamber Executive Director Patricia Forsythe said the taxes, that have been slated to be axed for years, were inefficient.
“They don’t raise in any one year a lot of money for the government but they do tie businesses in red tape,” she said. Labor says it’s worried the cuts will lead to a government reliance on stamp duty receipts.
The state government will also abolish share transfer duty, a tax on the transfer of non-listed shares in a NSW company or a unit trust scheme.
Non-real transfer duty – a tax on the transfer of business assets such as goodwill, intellectual property, patents and designs – will also no longer apply.
Last financial year, 40,000 businesses were hit by the share transfer duty and 5000 by the non-real transfer duty. On average, businesses paid $1000 in share transfer duty and $47,000 on non-real transfer duty.
The tax cut is expected to save businesses more than $400 million a year, or $1.8 billion over the next four years.
NSW Treasurer Gladys Berejiklian said: “Scrapping these taxes will provide businesses with certainty, improve economic efficiency and lower business operating and administration costs.
“This will help businesses grow, be more successful and employ more people – helping to drive economic growth.”
NSW shadow treasurer Ryan Park said $400 million less revenue would mean the state government would be overly reliant on stamp duty for funding schools and hospitals.
“The community wants to know how schools and hospitals are going to be paid for,” he said.
“Less revenue from other sources means we are going to become ever reliant on stamp duty receipts from the Sydney property boom. That already accounts for one in four dollars the government takes in state taxes. That’s not a good position to be in.”
NSW Business Chamber chief executive Stephen Cartwright said he welcomed the decision to scrap the business taxes, as they discourage mergers, acquisitions or restructures.
He said the next aim should be abolishing “other inefficient taxes” such as the emergency services levy on insurance premiums and abolishing stamp duty in favour of a broad-based land tax.