Coalition backbencher David Coleman wants capital gains tax on small startups eliminated, in order to encourage more investment in the sector.
“If a company had revenue of less than a million dollars over the last 12 months and had existed for two years or less, the owner of that company could put a proposition to investors saying ‘invest in our company, it may or may not work, but if it does work you won’t pay capital gains tax’.” Coleman told the ABC.
The MP from the Sydney seat of Banks argued that other asset classes that traditionally have drawn a lot of investment – property and shares – are subject to capital gains, so if the tax were withdrawn on startups then they could potentially become a more attractive investment.
He expects it to cost $50 million over the next four years, and $30 million annually by 2018.
“So that would give early stage business a strong selling feature when they’re competing for capital with other forms of investment,” Coleman said.
“We need to have a goal of fostering a culture of entrepreneurialism, we need more startups, we need to diversify our economy.”
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