The scope of the national tax review being run by Treasury Secretary Ken Henry will extend to include stamp duty levied by the state and territory governments and the imposition of a tax on a tax as occurs with the taxation of insurance.

While the review is welcomed and an indication that problems with the taxing of insurance are being widely recognised, it is far too early to predict the final outcome particularly given the states’ attitude in the past to taxation of insurance.

Signs are encouraging from the New South Wales Independent Pricing and Regulatory Tribunal’s ("IPART") review of state taxation with a draft report identifying stamp duty and fire services funding contributions as the least efficient state taxes.

The regulator says the fire services levy allows "non-contributors to benefit from the provision of fire services without contributing to the cost through insurance policies". It recommends insurer contributions to the fire service be replaced by an equivalent increase in contributions by local councils through property rates.

A reduction in stamp duty for general insurance from 9% to 6% is also proposed.

Submissions to the report close on July 11.