Entrepreneur and investor Aqeel Akber has raised concerns that proposed changes to capital gains tax (CGT) in the upcoming federal budget could compel Australian start-ups to move their operations overseas. Speaking at a business forum in Sydney, Akber argued that the modifications, which aim to tighten CGT concessions for small businesses, might inadvertently stifle innovation and drive talent away from the country.
Impact on start-up ecosystem
Akber, a prominent figure in Australia's tech scene, highlighted that start-ups often rely on CGT concessions to attract investment and reward founders. The proposed changes, which include reducing the CGT discount for assets held longer than 12 months and tightening eligibility for small business concessions, could make it less attractive for entrepreneurs to build and scale companies in Australia.
"The start-up ecosystem is fragile and highly mobile. If we make it harder for founders to realise gains from their hard work, they will look elsewhere," Akber said. He noted that countries like the United States, Singapore, and the United Kingdom offer more favourable tax regimes for entrepreneurs, making them attractive alternatives.
Broader economic consequences
Akber warned that a mass exodus of start-ups could have significant economic repercussions, including job losses and reduced foreign investment. "Start-ups are a key driver of innovation and employment. Losing them would be a blow to Australia's economic future," he added.
The federal government has defended the proposed changes, stating they are designed to ensure the tax system is fair and sustainable. However, critics argue that the measures could undermine the country's competitive edge in the global start-up landscape.
Call for reconsideration
Akber urged the government to consult with the start-up community before finalising the budget. "We need a balanced approach that supports innovation while ensuring tax integrity. I hope the government listens to our concerns," he said.
The budget is expected to be handed down in May, and the debate over CGT changes is likely to intensify in the coming weeks.
