Information Relating To Cash Flow Tax FOI Disclosure 2026/3 (pdf - 6.7 Mb)

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The Productivity Commission's cash flow tax (CFT) inquiry correspondence with Treasury reveals internal coordination on tax reform modelling and policy design during mid-2025. Documents include scheduling for briefings on "5 Pillars" short-listed reforms, technical discussion of a November 2025 Treasury meeting examining national consumption tax (NCT) modelling assumptions—particularly rental assumptions and their distributional impacts across firm sizes and the financial sector—and substantive feedback on the interim Pillar 1 report. Key technical issues discussed include the interaction between CFT and corporate income tax (CIT) liabilities, with Treasury questioning whether CFT should be treated as simply additive to CIT, and noting this treatment may not be clearly expressed in worked examples. Treasury also suggested the PC clarify that its proposed CFT option represents one pathway among multiple alternatives rather than a predetermined position, and requested additional material on modelling methodologies.