WA govt to close payroll tax loophole

West Australian Treasurer Ben Wyatt will seek to close a loophole that allows companies to abuse the tax system by signing up employees for training programs just to claim a payroll tax exemption.

The treasurer said on Monday that he did not want to go as far as defining what was appropriate training for the workforce but the payroll tax exemptions had to be tightened.

"Their employees go through a training program and then the employer cancels the course just prior to completion and then re-enrols them to extend the exemption for another two years," Mr Wyatt told 6PR radio.

"Chances are they're not actually breaking the law, but clearly the spirit of the law is a problem here and I don't want this to be exploited."

One option would be to limit the training programs to new employees, but Mr Wyatt said that would eliminate the capacity to retrain employees.

The treasurer said he plans to to present the change to cabinet soon.