Tax cuts on the agenda for small businesses in Federal Budget
Reducing the tax burden on businesses will help them invest, grow, employ more Australians and pay higher wages, Federal Treasurer Scott Morrison said in the 2018/19 Federal Budget.
The Government has legislated tax cuts for around 3.3 million small and medium Australian businesses as part of its Ten Year Enterprise Tax Plan.
The Plan also increases the unincorporated small business tax discount rate from 5 per cent to 8 per cent (up to a cap of $1,000). This rate will increase to 16 per cent by 2026‒27.
By lifting the small business entity turnover threshold from $2 million to $10 million, access has also been extended to a range of small business tax concessions.
These tax cuts began in 2016‒17. Companies with annual turnover less than $10 million had their tax rate cut to 27.5 per cent – the lowest level in over 50 years, the government said.
“This lower corporate tax rate was extended to companies with annual turnover less than $25 million in 2017‒18 and will extend to companies with annual turnover less than $50 million from 1 July 2018”.
Small businesses will also benefit from the Government extending the $20,000 instant asset write–off for a further 12 months to 30 June 2019. These businesses will now have additional opportunities to reinvest in their business and replace or upgrade their assets, it says..
Senator Michaela Cash, Minister for Jobs and Innovation, said “we need our small and medium enterprises to be fast adopters of technology in order to stay globally competitive and grow.
The Government is supporting these businesses by reducing taxes for small and medium enterprises and targeting incentives to promote research, development and new technology.”