Why CGT concessions are needed to fuel technological innovation and startups

Why CGT concessions are needed to fuel technological innovation and startups

Changes to capital gains tax are set to pass Parliament this week. An RMIT expert explains why concessions for startup businesses are needed to ensure local innovation and industry remain strong.

Professor My Nguyen, School of Economics, Finance and Marketing:   

“The proposed Innovative Business CGT Concession could significantly soften the impact of broader CGT reforms on Australia's startup sector by preserving tax incentives for founders, early-stage investors, and employees. 

"By keeping incentives for start-ups to be successful, the concession would help sustain investment in high-risk, high-growth ventures that are critical to technological innovation and productivity growth. 

“The concession could also strengthen talent attraction and retention. Startups often cannot compete with large corporations on salary alone, and favourable tax treatment of employee equity would make share-based compensation more attractive, particularly in AI, software engineering, biotechnology, and other deep-tech sectors. 

“However, the devil will be in the detail. If the eligibility rules are too narrow or complex, many genuine innovative firms could be excluded. 

“The concession may also create distortions and uncertainty, as companies may prioritise meeting the eligibility requirements instead of focusing on growth and innovation.  

“Businesses falling outside the definition may also be placed at a competitive disadvantage despite contributing to the broader innovation ecosystem.”  

Dr My Nguyen is an Associate Professor of Finance and co-leads RMIT University's Finance and Technological Innovation Research Cluster within the School of Economics, Finance and Marketing. 

***

General media enquiries: RMIT External Affairs and Media, 0439 704 077 or news@rmit.edu.au

Share

Related News

aboriginal flag float-starttorres strait flag float-start

Acknowledgement of Country

RMIT University acknowledges the people of the Woi wurrung and Boon wurrung language groups of the eastern Kulin Nation on whose unceded lands we conduct the business of the University. RMIT University respectfully acknowledges their Ancestors and Elders, past and present. RMIT also acknowledges the Traditional Custodians and their Ancestors of the lands and waters across Australia where we conduct our business - Artwork 'Sentient' by Hollie Johnson, Gunaikurnai and Monero Ngarigo.

More information