Assistant Treasurer Michael Sukkar has confirmed a review into the tax concessions will commence “to ensure current venture capital tax concessions support genuine early‑stage Australian start-ups”.
The review will be undertaken by the Treasury and Industry Innovation and Science Australia (IISA). It will cover the Early Stage Venture Capital Limited Partnerships (ESVCLP), the Venture Capital Limited Partnership (VCLP), and the Australian Fund of Funds (AFOFs) programs, a statement confirmed.
“Recent trends demonstrate a strong Australian venture capital industry with a record $1.3 billion raised in 2020, compared to $200 million in 2013, according to the Australian Investment Council,” Mr Sukkar said.
“This capital provides start-ups and small innovative businesses with funds for projects that can lead to technology improvements and boost productivity growth.”
The review comes five years after the government introduced the 2016 National Innovation and Science Agenda, which implemented reforms to enhance the concessional treatment of the ESVCLP program.
Mr Sukkar noted now is the “appropriate time to evaluate the impact of these tax concessions”.
“The Treasury and IISA will undertake stakeholder consultation over the coming months. It is expected that the final report will be delivered to the Treasurer towards the end of 2021,” he said.