This was previously announced last year, with businesses with a turnover of less than $2 million per annum getting a 1.5 percentage point reduction in tax rate.
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Small tourism operators will benefit from the tax cuts slated for small business, while Tourism Australia has also retained its $143m government funding.
She welcomed the reduction in the small business company tax rate to 27.5% and says increasing the eligibility threshold to $10 million means tens of thousands more SMEs are now in a better position to grow and to employ.
Tax cuts for businesses and support for innovation were some of the key highlights of the Treasurer’s Federal Budget speech.
The government’s proposal is modelled on the UK’s Google Tax, which was introduced in 2015 to discourage companies from routing profits through countries with lower tax rates, such as Ireland or Bermuda. The threshold would be progressively increased until all companies were taxed at 27.5 percent by 2023-24.
The budget announcement came as the central bank slashed interest rates to a new record low of 1.75 percent in order to stimulate the economy, following recent unexpectedly weak consumer prices.
The Turnbull government has promised company tax cuts to stimulate investment and action to prevent middle-income earners moving into a higher tax bracket, in a budget that will launch its election campaign.
Treasurer Scott Morrison has delivered the 2016 federal budget.
Under the new arrangements to take effect from July 1, 2017, the DPT will penalise companies that are found to have shifted profits offshore by taxing those profits at a rate of 40 percent.
Small businesses received immediate tax relief, with all companies to follow over the next decade.
The new accounting team will cost an extra $679 million over four years, but the government insists it will be able to dig up $3.7 billion in lost revenue over the same period.
There has been no tax cut for those earning less than $80,000 annually as the government says they have benefited through the abolition of the carbon tax.
“There is no question that Australia’s company tax rates are excessive by global standards”, he added.
The tax “will target companies that shift profits offshore through arrangements involving related parties” that result in less than 80 per cent tax being paid overseas than would otherwise have been paid in Australia, where it is reasonable to conclude that the arrangement is created to secure a tax reduction, and that do not have sufficient economic substance, budget papers state.
“What we need to see now is every effort made to strengthen our tax system to build consumer confidence with a clear long term plan from Government and Opposition following the election to support consumers and businesses alike”, Zimmerman said.
The new tax, in conjunction with MAAL, could raise up to $650 million over four years from large multinationals.
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Business Council Chief Executive Jennifer Westacott described the budget as “responsible”.
