The government expects this will affect approximately 870,000 businesses.
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Seeking to shore up Australia’s economy as a mining investment boom fades, Treasurer Scott Morrison unveiled tax cuts for small businesses and a jobs package for the nation’s youth in his annual budget Tuesday.
Increasing penalties for multinational that fail to meet their compliance and disclosure obligations to the ATO.
The treasurer said two key revenue-generating measures – a crackdown on tax avoidance by multinational firms and an increase in cigarette excise – would raise Aus$3.9 billion and Aus$4.7 billion respectively over the next four years.
Super tax breaks, where the government will target high-end super tax concessions to preserve savings incentives for women and low-income earners, was a welcome detail to come out of last night’s budget. From July 1, 2017, anyone earning over A$250,000 will pay 30 percent tax on their so-called superannuation contributions instead of 15 percent – a regime that now kicks in at A$300,000.
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.
There will also be a new diverted profits tax, similar to one in the United Kingdom that taxes multinationals on income they have sought to move offshore.
“If we wish to continue to see our living standards rise with more jobs and higher wages, we need to ensure our tax system encourages investment and enterprise”.
Specific organisations have not been named by past year during a Senate inquiry into tax avoidance, the tax practices of technology companies Apple, Google and Microsoft came under scrutiny. 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.
Kiwi managers may be less likely to report to bosses in Australia in the wake of changes announced in the Australian budget, a tax expert believes.
“Everyone has to pay their fair share of tax”, Mr Morrison told Parliament.
The budget contains a new plan to help young people get employment, which will include boosting their job readiness and an internship program with up to 120,000 placements over four years to help young people who have been in employment services for at least six months to gain experience “within a real business”.
Federal Treasurer Scott Morrison delivers his Budget speech tonight.
Businesses with a turnover of less than $10 million will be able to access other measures.
Labor has revealed separate PBO costings of various levels of company tax cuts – to 27%, 26% and 25%.
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The government’s long-awaited tax plan amounts to changes rather than widespread reform. At the time, then-managing director of Google in Australia, Maile Carnegie, admitted Google Australia’s profits were mostly taxed in Singapore.
