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Potential Tax Reforms Could Elevate Burdens on Major Corporations

A significant overhaul of the tax system is being considered by Treasury, and it could have profound implications for large corporations such as Woolworths and Rio Tinto. The proposed reforms aim to recalibrate how these companies are taxed, potentially resulting in higher effective tax rates for firms earning over a billion dollars annually.

The Proposed Cash Flow Tax

Central to the discussion is a new cash flow tax model, which is designed to modify the current corporate taxation landscape. Unlike traditional profit-based taxes, a cash flow tax focuses on the actual cash inflows and outflows of a company, providing a different perspective on taxable income.