Backbencher proposes startup capital gains tax removal in Australia

Australia considers removing capital gains tax paid on investments in startups following a proposal by David Coleman, a backbench member of parliament.

The government of Australia is considering a proposal by a coalition backbencher to remove capital gains tax on startup investments, according to Business Review Weekly.

The proposal from David Coleman, who represents the Division of Banks in New South Wales, would enable investors to not pay capital gains tax on investments in startups that have an annual revenue of less than A$1m ($730,000) and are less than two years old.

The proposal was to be backed by Joe Hockey, in his role as treasurer for the Australian government, in a speech at the Australian Financial Review tax summit in September. However, Scott Morrison was appointed treasurer by new prime minister Malcom Turnbull the day before the event.

The proposal is believed to cost the Australian government A$50m over the course of its first four years with the amount increasing year on year. By 2018-19 it is expected reach A$30m for that one year.

The proposal is being considered by the task force that is writing the government of Australia's tax white paper strategy.

– Photo courtesy of JJ Harrison (CC BY-SA 3.0 via Wikimedia Commons)

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