The Ralph Report Depreciation Proposals and Investment Neutrality.

The Review of Business Taxation chaired by Mr John Ralph has suggested sweeping changes to business taxation in Australia. In particular it has been proposed that accelerated depreciation provisions be removed to finance a reduction in the company tax rate. If some degree of accelerated depreciation is to be retained, it is suggested that this should involve a uniform loading on depreciation rates for all assets. The aim is to provide a more uniform treatment of assets with different economic lives. This paper examines the neutrality of these proposals for unincorporated enterprises and companies owned by Australian shareholders.