Tax plan clarifications needed in wake of dropped PPL scheme

BUSINESS groups are pushing the Federal Government to drop a 1.5% tax rise, originally part of the now-abandoned paid parental leave scheme.

The renewed pressure comes after reports on Friday the government was considering a new "two-tiered" tax system - one for small business and a second for larger firms.

After Prime Minister Tony Abbott dropped his signature PPL scheme on Monday but promised a 1.5% tax cut for small businesses, the big end of town has been left in doubt about the future of its tax arrangements.

The Business Council of Australia, Australian Chamber of Commerce and Industry and manufacturer's lobby Australian Industry Group have all called for clarification.

With the federal leadership in doubt, BCA chief executive Jennifer Westacott said on Friday that not giving the promised tax cut to large businesses was "simply a levy by another name".

"The government needs to confirm it will not implement the 1.5% levy on large businesses intended to pay for its now abandoned paid parental leave scheme," she said.

"Speculation that only small businesses will receive a company tax cut also needs to be addressed."

Senior government figures including Treasurer Joe Hockey would not be drawn this week on the future of the corporate tax landscape.

Mr Hockey said on Thursday that the government would have "more to say" about the issue soon, but provided no certainty in the near future.


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