Wesfarmers share sink as chair Michael Chaney bemoans cash flow tax proposal

The news: Wesfarmers shares dropped on the ASX after chair Michael Chaney warned that the Productivity Commission's recommendation to introduce an extra 5% cash flow tax on large companies would drive investment capital out of the country.

The numbers: Shares were down 5.3% to $87.73 at 1:30pm AEDT, having gained around 30% over the last 12 months.

The context: In a trading update, Chaney also said consumer demand across the group "remained positive" in the first quarter, but noted that cost-of-living pressures "remain a challenge".

What they said: "Wesfarmers pays corporate tax of 30% on its Australian profits plus another 8% in payroll tax and other government taxes and charges,” said Chaney.

“Including an additional cash flow tax of 5%, our total adjusted tax take of about 43%, which would make Australia’s taxation regime one of the most onerous in the world. And have no doubt, it would drive investment offshore."