The majority of small business owners would likely reinvest a company tax cut back into their firms, new research shows.
The federal government is facing calls to cut the company tax rate from 30 per cent amid claims it is too high compared with other developed countries.
Just over half of small business owners say that tax cuts are needed to ensure Australia remains globally competitive, a survey by cloud accounting software group MYOB found.
Fifty three per cent they would be more likely to reinvest in their business if the government delivered a tax cut.
MYOB chief executive Tim Reed said while the government’s 2015 budget delivered a tax cut for companies with revenues under $2 million, small business owners would be more likely to expand their operations if the 30 per cent rate was cut.
Council of Small Business Australia chief executive Peter Strong said tax cuts were needed encourage growth.
“This would actually be a benefit that would be directly targeted at businesses that want to grow, that want to do something,” he told AAP.
But even a simplification of the tax system would substantially benefit small business owners, Mr Strong said.
The survey also found the vast majority of small business owners agreed innovation was key to Australia’s success even though only four per cent had invested a set amount into it.
Mr Strong said this number could be misrepresentative because innovation has become such a poorly defined buzzword.
“What we call innovation – they just don’t see it that same way … they don’t care if they are `innovating’ or not. They just want to do something different and new,” Mr Strong said.