Mindful of possible criticism over his tax plans, Morrison said jobs and growth were more important for Australians than “sweeteners”.
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The Australian Tourism Export Council (ATEC) has failed in its bid to cut backpacker taxes and those visitors now will pay a marginal tax rate of 32.5 per cent from their first dollar earned, further encouraging them to take holidays in New Zealand.
Tax breaks will be delivered to small and medium-sized businesses and tax concessions slashed for high-income earners.
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.
“Together with the Multinational Anti-Avoidance Law, introduced by this government last year, the DPT is expected to raise around $650 million over four years”, Treasurer Scott Morrison said in his budget speech.
The accounts showed the US company paid A$16 million in taxes past year, still a fraction of its overall profit, as revenue from local advertising on its search engine business, estimated at more than A$2.5 billion, was booked offshore in the low tax nation of Singapore.
A personal income tax rate of 37 percent will kick in at A$87,000 from July 1, instead of the current A$80,000 – benefiting the top 20 percent of wage earners.
And on multinational tax, the government is establishing a new 1,000-strong taskforce and is implementing a diverted profits tax – a so-called Google tax – similar to that in place in the UK.
We will also give hard working Australians and the Australian businesses that employ them greater tax relief so they can earn more without being taxed more.
The budget reforms which aim to lower tax and provide access to tax concessions for small business could benefit millions of Australians, the government has said.
The move follows tax transparency legislation the government passed in late 2015, which aimed to force hundreds of Australia’s largest companies to be more transparent about their tax bill.
The treasurer has also hinted he will be looking to tackle “bracket creep”, where earnings do not keep up with tax rates, and someone earning a little more gets pushed into the next tax bracket without their standard of living increasing.
Phase two of the 10-year enterprise tax plan will see the extension of the lower tax rate of 27.5 per cent to all businesses, by continuing to step up the threshold each year until 2023-24, before reducing the 27.5 per cent rate for all businesses to 25 per cent at the end of ten years in 2026-27.
Treasurer Scott Morrison announced the changes as part of a ten-year enterprise tax plan.
Tuesday will set the scene for one of the most enthralling political campaigns in recent memory, with a federal budget to be delivered on the eve of the dissolution of both houses of parliament for a July election.
“We are encouraged by the Government’s commitment to reduce the company tax rate for all businesses”.
The government is aiming to slow this ballooning debt over the next five or six years, returning the budget to surplus by around 2021.
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This should be done by prioritising revenue raising measures to fund essential services and jobs growth, rather than by focusing narrowly on cuts to spending and unaffordable tax cuts in an election year.
