ABSTRACT
The Australian Tax Office has supported research into compliance costs, but these studies indicate that compliance costs are a major issue for small businesses. Tax expenditures may not be the optimal way of providing aid and may not promote the desired investments. In the countries surveyed, aid through the tax system to small and medium sized enterprises (SME) covers these areas include the encouragement of investment in SMEs by means of venture capital funds with associated income tax relief; and lower income tax rates for small businesses. The areas also include preferential capital gains treatment on disposal of business; estate duty concessions; and special treatment of particular activities usually carried on by SMEs. New Zealand has no tax investment incentive program equivalent to the British Enterprise Investment Scheme or Venture Capital Trusts, or the Australian Pooled Development Fund. The United States and Britain still have special arrangements for small or closely held companies which have concessionary elements in them.
