Scott Morrison is banking on more tax cuts for the growing army of small businesses and an income tax break for 500,000 middle-income Australians to bolster the Coalition’s election hopes and drive the economy.
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Last year’s budget contained plans to scrap the tax-free threshold for people on working holiday visas and to tax them at 32.5 per cent from the first dollar earned from 1 July.
Tuesday’s budget unveiled a new “diverted profits tax” similar to a scheme introduced by Britain’s Conservative Government which taxes multinationals on income they have sought to shift offshore at a penalty rate of 40 per cent. A new Tax Office taskforce with more than 1000 specialist staff to police and prosecute companies was announced along with other changes to close tax loopholes.
“The Government will also extend the unincorporated tax discount to businesses with an annual turnover of less than $5 million and will increase the discount to 8% capped at $1,000”.
Australian Small Business and Family Enterprise Ombudsman, former pharmacist and beyondblue CEO Kate Carnell said it’s never been a more exciting time to be an SME.
That tax cut will be progressively widen to include firms earning up to $100 million by 2019-20 and then all businesses in the country over the next 10 years.
Specific organisations have not been named by a year ago during a Senate inquiry into tax avoidance, the tax practices of technology companies Apple, Google and Microsoft came under scrutiny.
Australian Treasurer, Scott Morrison, noted “Everyone has to pay their fair share of tax, especially large corporates and multinationals” during his budget presentation.
Now that the government has outlined their budget plan, it had us thinking, what would our budget look like for 2016/17 financial year?
But four hikes are planned for the excise tax on cigarette. If you have accumulated more than this, you’ll have to pay 15¢ tax on it. The threshold will be indexed to increase only with inflation.
Just hours before the Budget was delivered, Australia’s central bank revealed it was cutting interest rates to a record low of 1.75 per cent, partly because of unusually low inflation and global uncertainty.
Raising the bracket at which the 37% tax rate starts from $80,001 to $87,001, beginning July 1.
This Budget keeps Australia on a sustainable path to bring the budget back into balance.
It is forecast to raise Aus$3.9 billion (US$2.95 billion) over the next four years when combined with a broader tax avoidance package.
The budget papers show over the long term, lower company tax is expected to add one per cent to GDP.
The defense industry. The government will spend A$142.9 billion on defense over four years.
870,000 businesses will have their tax reduced, he says.
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The government will create a A$5bn (US$3.8bn; £2.6bn) fund for critical infrastructure in cities, Mr Morrison announced on Monday.
