The Council of Small Business Organisations Australia (COSBOA) has warned the Federal Government against introducing tax reforms that could unfairly impact genuine small businesses, arguing the proposed changes risk damaging investment confidence and succession planning across the sector.
The organisation has raised concerns about proposed changes to capital gains tax arrangements and discretionary trusts, saying many small business owners rely on existing structures to manage risk, plan for retirement and support family succession.
COSBOA CEO, Skye Cappuccio, said small business operators were becoming increasingly concerned about reforms that fail to recognise the realities of how small businesses operate.
“Small business owners are increasingly concerned they will be unfairly impacted by changes that do not properly recognise how their organisations actually operate,” Cappuccio said.
“These are not abstract tax settings for small business owners. These decisions are deeply personal and directly tied to retirement planning, succession planning, family livelihoods and the future of businesses built over generations,” she said.
COSBOA said many independently owned businesses structure their operations through discretionary trusts and other long-established arrangements, not for tax avoidance purposes, but to provide flexibility, asset protection and long-term stability.
The organisation warned that broad tax reforms could create unintended consequences for family-owned businesses already facing rising operating costs, increasing insurance premiums, higher wages and ongoing economic uncertainty.
COSBOA also argued that existing capital gains tax concession thresholds no longer reflect the realities of modern small business operations and should be updated.
The group is calling for exemptions or alternative arrangements for genuine operating businesses and has urged the Federal Government to consult closely with the small business sector before implementing major reforms.
The concerns come amid broader debate surrounding changes to capital gains taxation and trust arrangements outlined in the Federal Budget, with industry groups warning the measures could discourage entrepreneurship and long-term investment.
COSBOA said small businesses should not be treated in the same manner as large multinational corporations and warned that poorly designed reforms risk undermining confidence at a time when many operators are already under significant financial pressure.
The organisation is calling on Government to:
- Modernise the existing Small Business CGT Concessions by increasing eligibility thresholds to include businesses with annual turnover under $10 million and net capital assets under $12 million
- Explore exemptions or alternative arrangements for genuine small businesses operating through trusts, similar to existing exemptions available to primary producers
- Ensure fair and practical valuation arrangements are available from 1 July 2027 if the CGT measures proceed
- Undertake further consultation with the small business sector before implementing changes
COSBOA believes effective tax reform should support business growth, investment and employment while maintaining confidence among Australia’s small business community.