Andrew Barr.

Andrew Barr. Photo: AAP/Alan Porritt

The ACT government imposes higher taxes on businesses than any other state or territory, a conservative think tank says.

The Institute of Public Affairs says the territory's "burdensome" property tax structure was a major contributing factor to the "state's (sic) high tax result."

IPA senior fellow Julie Novak has also taken aim at the territory's tax reform efforts, criticising the package for not containing spending cuts.

In her report, Business Bearing the Burden, Ms Novak argues that the territory has Australia's most onerous property tax regime and she urges the territory government to "vigorously explore deep spending cuts".

However, Treasurer Andrew Barr said on Monday that Ms Novak's criticisms were rooted in a "dogmatic" ideological commitment to cutting taxes and government services.

The IPA researcher said the territory government's tax reform package in 2012 had the left the jurisdiction paying higher property taxes than any other.

"Indeed, under the Gallagher government's tax reforms, in which commercial property land taxes were subsumed into general rates, the ACT now has the most onerous property tax regime in the country," Ms Novak wrote.

"To its credit, the territory government maintains reasonably competitive payroll tax and insurance duties, but the property tax sting makes Canberra a less attractive place to conduct business.

"The most disappointing aspect of the ACT government's tax reform package, announced in the 2012-13 budget, is that it did not outline a plan for comprehensive spending reductions as a vehicle to lighten the business tax load over the medium to long term."

She went on to attack the ACT Labor government for its "overspending" in the past 10 years.

"The uncompetitive tax position of the ACT cannot be separated from the overspending of the territory government, especially during the past decade," Ms Novak said.

"The commitment to remove insurance taxes and conveyancing duty, over a period of between five to 20 years, is laudable, but the big spending architecture has been kept in place.

"And even though Canberra is one of the wealthiest communities in Australia, there is no doubt that community expectations for more spending will place even more pressure on the ACT budget.

"To create space for more tax reductions that boost business growth and therefore new jobs, the ACT has no long-term option but to more vigorously explore deep spending cuts."

The Treasurer defended his government's record on business tax.

"The ACT has a business-friendly tax regime," Mr Barr said in a statement.

"The IPA appears to have missed the fact that in the last budget the ACT government lightened the taxation burden on local businesses.

"Due to the cut to payroll tax, the ACT has the highest payroll tax threshold in the nation, and is the lowest-taxing jurisdiction for businesses with a payroll of up to $4.7 million.

"The IPA report also shows that the ACT has the most competitive taxation regime for small- and medium-sized businesses."

The Treasurer said the government had no plans for the "deep spending cuts" prescribed by Ms Novak.

"The ACT government has a measured and responsible plan to return the budget to surplus by 2015-16," he said.

"We will do this by making responsible savings.

"Deep spending cuts, as advocated by the IPA, would needlessly harm the ACT economy."