Small businesses are set to enjoy a tax cut announced in tonight’s Budget.
“The $5.5 billion Jobs and Small Business package is the biggest small business package in our nation’s history,” Treasurer Joe Hockey said in a joint statement with Finance Minister Senator Mathias Cormann.
“From 1 July this year, small companies with annual turnover of less than $2 million will have their tax lowered from 30% to 28 ½%.
“Unincorporated business will get an annual 5% tax discount up to $1,000.
“Small businesses will also be able to immediately deduct new assets up to $20,000.
“There are a range of other measures that cut red tape and encourage entrepreneurship to help our more than 2 million small businesses invest more, grow more and employ more.”
This is the lowest small business company tax rate in almost 50 years.
Reducing the rate of company tax is expected to improve the cash flow of incorporated small business and increase their capacity to engage in the economy.
The tax cut will apply from 1 July 2015, meaning companies with Pay‑As‑You‑Go instalments can benefit from their first payment after 1 July 2015.