The payday fintech suggests fintechs look to Asia
Australian fintech MoneyMe has hit out at the corporate tax rate and suggested opportunities may be better in Asia.
Payday lending fintech MoneyMe has launched an attack on the Australian government for its corporate tax rate and said that ambitious fintechs looking to expand should look to Asia instead.
With high taxes preventing business growth, Asia’s rising middle class and declining venture capital interest at home, hungry fintechs should consider packing their bags and going overseas.
“In Australia, our corporate tax rates are inhibitive to the point that it can be far more advantageous for start-ups to locate… outside of Australia,” said Clayton Howes, CEO of MoneyMe.
“In Singapore rates are just 17 per cent and in Hong Kong 16.5 per cent – compared to our hefty 30 per cent which is only set to reduce to 25 per cent over a ten-year period… this is unfortunate for Australian start-ups who locate operations domestically.”
No evidence was provided that the company tax rate was inhibiting start-ups. Company tax only applies to profits and many Australian start-ups, including most fintechs, are unprofitable.
No mention was made either of Australia’s dividend imputation system (franking credits), the effect of which is the company tax rate for Australian resident shareholders is “close to zero”, writes the non-partisan think tank the Grattan Institute.
In addition to opportunities in Asia, MoneyMe also warned that there were dangers in staying home.
“Australian fintechs at risk of competition from markets where the cost of innovating is far lower, and the need for innovation far higher,” Mr Howes said.
“With Asia looking set to lead the next global surge of fintech growth, Australian fintechs that don’t take a pre-emptive step towards preparing for this inevitability risk being taken over by our nearby overseas rivals.”
MoneyMe is one of the few Australian fintechs to have hit profitability. Having hit A$125 million in originations, it is one of the largest fintech lenders in Australia.