Arnold Bloch Leibler (ABL) senior partner Mark Leibler AC will be the only representative from a law firm at the Federal Government's upcoming tax forum in Canberra.
Invited by Treasurer Wayne Swan, Liebler will join 184 representatives of the community, business, unions and government, as well as academics and other tax experts, on 4 October to discuss priorities and directions for further tax reform.
Following last year's release of Australia's Future Tax System Review, the two-day forum will focus on personal tax, transfer payments, business tax, state taxes, environmental and social taxes and tax system governance. The forum will be followed by a debate on tax reform in Parliament.
"There are a couple of problems that I think need to be looked at very carefully. The primary one is the reform of the personal income tax system and specifically, the simplification and flattening of marginal tax rates and brackets," Leibler told Lawyers Weekly.
"In Australia, the top marginal tax rate - if you include the Medicare levy and the flood levy - is 47.5 per cent. If the company tax rate is reduced to 29 per cent, which is proposed by the Government, then the effective margin becomes 18.5 per cent. A margin of that size is going to be a very significant factor in driving aggressive tax planning behaviour by tax payers."
According to Leibler, such a significant margin is unfair.
"There's an element of unfairness here because people doing pretty much the same work - one through a corporate structure and the other one as a salary and wage earner - are going to be paying differential tax rates," he said. "I think it strikes at the integrity of the tax system."
Noting the financial constraints which potentially limit any immediate tax reform, Leibler added that while the issues surrounding marginal tax rates and brackets cannot be solved over night, Australia needs to at least be heading in that direction.
Other areas which need focus, according to Leibler, are tax governance and the role of the Inspector General of Taxation.
The forum will also help identify further reforms that are needed to take advantage of the opportunities and challenges ahead for Australia, including the shift in global economic weight from the West to the East, the ageing population and the transition to a clean energy future.
Blake Dawson partner Teresa Dyson has also been invited to attend the forum as a representative of the Law Council of Australia. Dyson is the chair of the Council's Taxation Committee.