Shadow Assistant Treasurer, Andrew Leigh, was caught out in an embarrassing claim about a fundamental feature of Australia’s tax system.
In an interview on Sky News Australia, Andrew Leigh said the following to justify Labor’s anti-competitive policies on tax:
“What Australians have to recognise is that our corporate rate has dividend imputation. That means we take a third of the company tax revenue and we give it back. So a corporate tax rate of 30 per cent with imputation raises as much as a rate of 20 per cent without imputation.”
This statement is plainly false.
Dividend imputation does not – in any way – alter the amount of tax paid by companies. Dividends are paid to shareholders in after tax proceeds.
Dividend imputation does not reduce the corporate tax rate.
Dividend imputation does not reduce the tax paid by corporate entities.
And for foreign companies investing in Australia – for whom Australia is competing with many lower taxing first world economies – dividend imputation provides no benefit.
So either Andrew Leigh is hopelessly incompetent and doesn’t understand our tax system, or is deliberately misleading Australians.
Either way, Andrew Leigh should cease making deceptive statements about our tax system, and stop trying to cover Labor’s tracks for the untenable position they’ve adopted in opposing corporate tax reform.