Labor has pledged to overhaul Australia's tax system in a bid to make the country's funds management industry globally competitive.

The raft of measures include abolishing the outdated Section 6C tax and establishing a clearer definition for stamp taxation on insurance.

The Shadow Assistant Treasurer Chris Bowen announced the policy at the Investment and Financial Services Association (IFSA) conference on Friday.

Division 6C tax will go in order to simplify the tax system for managed investment schemes and real estate investment schemes (REITs). 

"Our consultations with industry tell us that the operation of Division 6C is an ongoing administrative problem, with seemingly minor matters and small sources of income having major administrative impacts," Bowen said. 

"This is a matter, which has been often raised by IFSA and the Institute of Chartered Accountants. Labor will direct the Board of Taxation to examine options to introduce a specific managed investments tax regime in Australia to effectively replace the moribund Division 6C of the Tax Act," he said.

Labor will also simplify stamp duty charges on insurance. Depending on state policy stamp duty can either be charged 5 per cent in the first year of a premium or charged on premium basis. Labor will seek to implement a common definition for taxing insurance premiums.

 "We are very pleased with Labor's announcement today. We like the way you are open to our business and have taken up the opportunity to take up our suggestions," IFSA chief executive Richard Gilbert said.