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Budget crackdown on share buybacks actually benefits the majority

The old system of including franking credits in the returns of off-market buybacks favours a small, select group of shareholders over others.

The vociferous adverse reaction of various vested interest groups to the budget announcement to amend the tax treatment of off-market buybacks is hardly surprising.

It’s a pity that it’s so misguided and based on poor logic. Sure, there’ll be some shareholders who lose but also a lot that win (not to mention the government budget benefit and the integrity of our tax system)!

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Christine Brown is an Emeritus Professor at Monash University)
Kevin Davis is Professor of Finance at The University of Melbourne.

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    Original URL: https://www.afr.com/politics/federal/budget-crackdown-on-share-buybacks-actually-benefits-the-majority-20221030-p5bu4j