Productivity Commission Proposed Cash Flow Tax

Written by Claude Haiku 4.5 from the extracted text on 28 Feb 2026. It can miss or misread redacted and scanned pages. Check the source before relying on it.

Treasury and Productivity Commission officials exchanged feedback on a draft Pillar 1 interim report examining a proposed Cash Flow Tax (CFT) as an alternative tax reform measure. The Productivity Commission's Benjamin Mitra-Kahn responded to Treasury concerns raised by Susan Bultitude, defending the CFT proposal against comparisons to an Allowance for Corporate Equity (ACE) approach. On administrative complexity, Mitra-Kahn stated the CFT would be simpler to introduce and administer than an ACE, asserting this conclusion was supported by evidence from business and Australian Taxation Office engagement. Regarding the risk of selecting an incorrect "normal" rate of return under either approach, Mitra-Kahn argued the CFT design mitigates this risk compared to an ACE by allowing CFT losses to be deducted from Corporate Income Tax liability, reducing reliance on the uplift rate and increasing the likelihood of