Election overshadows budget reform: BDO

TAX CHANGES TIPPED FOR 2016 FEDERAL BUDGET

SUPERANNUATION

Changes to contribution amounts and concessions expected. Consultants BDO says the government will be wary of alienating voters so close to an election, so any moves will be justified on the basis of fairness.

CORPORATE TAX

Reduction is still on the agenda but government may choose to bring in the first cut in a future year and reduce the rate progressively over time.

PERSONAL INCOME TAX

Unlikely to be any changes to rates or deductions, other than possibly decreasing the income level where additional 15 pct tax on superannuation concession kicks in. Good chance concessional contributions cap for super will be decreased.

"SIN" TAXES

Strong chance excise on cigarettes will be increased, but will be less than the four rounds of 12.5 pct increases Labor proposed last year. Government may look at alcohol excise.

MULTINATIONAL TAX

Still very much on the agenda. Toughening some provisions may help counter some of the negative sentiment that may come from reducing the corporate tax rate.

R&D TAX INCENTIVE

May be reduced due to its cost. BDO argues it should be retained.

INFRASTRUCTURE

Speculation government may issue 30-year bonds for first time to fund infrastructure projects, but not clear if it would come with a tax benefit for investors or not.

(Source: BDO tax partner Mark Molesworth)