10 million Aussies to receive an extra $420 at tax time
More than 10 million Australians are set to benefit from an additional one-off $420 tax offset from July this year following an announcement outlined in today's Budget.
Billed by the federal government as a cost of living tax offset, the reduction will be combined with the existing low and middle income tax offset (LMITO) which applies to earners making as much as $125,999 per year.
"Individuals already receiving the low and middle income tax offset will now receive up to $1500 and couples up to $3000 from July 1 this year," said Treasurer Josh Frydenberg in his Budget speech.
While the move is likely to be welcomed by low and middle income earners this year, the same group may be worse off come tax time next year given that the Budget makes no mention of an extension to the low and middle income tax offset for the 2022-23 financial year.
The government has made its intention to push ahead with its broader tax reform agenda from 2024 clear though.
"Under the cuts, the 37% tax bracket will be abolished, the top 45% bracket will start from $200,000 and the 32.5% rate will be cut to 30% for all incomes between $45,000 and $200,000," said director of tax communications at H&R Block, Mark Chapman.
Away from the personal tax front, the Budget also contains a number of new initiatives aimed at Australian businesses.
For the 2022-23 financial year the GDP uplift rate for PAYG and GST installments will be lowered from 10% to 2% - a move which the government says will provide cash flow support to around 2.3 million small-to-medium businesses and sole traders.
Treasurer Frydenberg also outlined a package of tax invectives for small businesses willing to invest in staff training and new technology.
"Starting tonight, for every hundred dollars a small business spends on training their employees, they will get a $120 tax deduction," he said.
"Every hundred dollars these small businesses spend on digital technologies like cloud computing, eInvoicing, cyber security and web design will also see them get a $120 tax deduction. Investments of up to $100,000 per year will be supported by this new measure."
Get stories like this in our newsletters.