Australia undertakes biggest tax review in 50 years

Australia has launched the most comprehensive review of its tax laws in more than 50 years as it bids to make them simpler and more globally competitive, Treasurer Wayne Swan said Wednesday.

The government was serious about the "modernization of our tax and transfer payment system," Swan said as he released a tax discussion paper.

"So much has changed in Australia since the war: globalisation, the rise of new information technologies, population ageing, climate change -- all of these challenges demand a comprehensive review of our tax system," he said.

The paper is the first step in a review to simplify Australia's complicated taxation system, which includes at least 99 federal taxes, 25 state government taxes and one local government tax.

It suggests that the tax structure could discourage foreign investment in Australia at a time when the government is pushing to make the country a financial hub for the region.

"The rapid growth in cross-border investments has highlighted the importance of international factors when considering how Australia taxes savings and investments," the paper says.

It notes that Australia's company tax rate of 30 percent is the eighth highest among Organization for Economic Cooperation and Development countries, while company tax rates overseas are falling.

"There are ongoing challenges to our ability to tax residents on their foreign sourced income and nonresidents on their income from investing in Australia," it said.

Swan refused to comment on which taxes could be eliminated but said the aim of the review was to make the system simpler and more efficient.

The Australian government has already said the Goods and Services Tax (GST), which places a 10 percent levy on most goods and services and was introduced by the previous conservative administration, will not be altered.

The findings of the review are expected to be announced by the end of the year.