Insurance taxes, rates and land stamp duties should be replaced by a property services tax, KPMG has told the Federal Government’s inquiry into tax reform.

KPMG says stamp duty, insurance taxes and emergency services levies “are highly inefficient taxes”.

Insurance taxes and emergency services levies encourage underinsurance and non-insurance, and this raises the burden on governments when disasters occur.

KPMG says a property services tax should be based on property values and administered by the Australian Taxation Office rather than state revenue offices.

The Government plans to release tax reform options in a green paper later this year and take proposals for change to the next election.