There is a bigger story beyond the sun setting on the s12J incentive. The Treasury indicated in the 2020 budget that the government was reducing the number of tax incentives in the tax system, and the 2021 budget had reminded taxpayers that four further tax incentives were scheduled to lapse on reaching their respective sunset dates.

The Treasury noted that: “Tax incentives often undermine the principles of a good tax system, which should be simple, efficient, equitable and easy to administer.”

It raises the question: do incentives have a role? Is a lower tax rate the panacea for investment attraction?

Michael Avery speaks to Chris Axelson, chief director of economic tax analysis at the Treasury; and Duane Newman, joint MD at Cova Advisory.

Michael Avery talks to a panel about the Treasury's changes on tax incentives.

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