Why Canberra should cut the small business tax rate to 20 per cent

Australian small businesses are being ripped off by paying one of the highest company tax rates in the world.

As a small business operator and international business coach, I keep a close eye on what's happening in the business world.

In recent years, I've watched as many countries have dramatically cut their corporate tax rates.

Inexplicably, in Australia the federal government continues to force businesses to pay a top corporate tax rate of 30 per cent.

The rate for small to medium-sized businesses has come down slightly, but it's still a whopping 27.5 per cent.

We're paying way too much compared with our overseas counterparts.

The SME rate could be cut to 25 per by 2021 under a Coalition proposal, but this does not go far enough.

Whoever forms government after the May 18 election needs to lower the SME rate to at least 20 per cent.

Our politicians need to remember the major role that SMEs play in this country - they employ millions of people and make a significant contribution to the economy.

As well as advising Australian business operators, I also have clients in Canada. The company tax rate there has been cut to less than 20 per cent.

The United Kingdom's rate is also now less than 20 per cent.

The United States has dropped company tax to 21 per cent.

Other countries have done it, why not Australia?

If we want to have a strong economy and be globally competitive, we need to catch up to the rest of the world and lower company tax rates.

Cutting Australia's company tax rate would equate to a saving of about $150,000 for a small business with a $10 million turnover.

With the extra money, owners could reinvest in their businesses by reducing debt, boosting growth, hiring new staff, buying equipment and developing a marketing plan.

Pouring a large sum of money back into a business, instead of just handing it over to the tax office every year, can take a small business to a whole new level.

It's not just a good thing for businesses, it's good for all us.

When businesses grow, so too does the Australia economy.

What politician or political party doesn't want to see that happen?

Jamie Cunningham lives in regional Victoria and is the founder of SalesUp business coaching