RAJ REPORT

Would a increase in GST lead to a removal of State stamp duty on Insurance——A larger GST in a tax-mix change – John Freebairn | Insights Vol 13 – April 2013 | Faculty of Business and Economics | The University of Melbourne

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Stamp duties are a form of indirect tax, similar to the GST – they are an additional cost, much of which is passed on to buyers as higher prices. But stamp duties fall on business activities with extra distortions relative to a GST with its final incidence on household consumption. Conveyance duty as a transaction tax also reduces transfers of ownership of property from less productive to more productive owners and uses. There is no market-failure reason to impose a higher indirect-tax burden of stamp duty plus GST on insurance relative to the flat GST burden on most other products. These additional distortions lie behind the higher marginal efficiency cost of stamp duties relative to the GST shown in Table 3

 

 

A larger GST in a tax-mix change – John Freebairn | Insights Vol 13 – April 2013 | Faculty of Business and Economics | The University of Melbourne.

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