The Coalition Government is paving a way for more investment, jobs and potential higher salaries as it is recently announced that tax relief for small and medium businesses will be delivered earlier than expected.
In a joint statement by Australia Treasurer Josh Frydenberg and Prime Minister Scott Morrison, it was indicated that the legislation is set to be introduced during the next session of Parliament. This will impose lesser tax for more than three million businesses that employ nearly seven million Aussies.
What are the details?
Businesses with a turnover below $50 million will be subjected to a tax rate of just 25% as early as 2021-2022, five years earlier than the currently established 2026-2067. The modifications will be mirrored in the roll out of the 16% tax discount for unincorporated businesses.
Further, a small business, such as an independent supermarket or a pub, that makes $500,000 profit, will have an additional $7,500 in 2020-21 and $12,500 in 2021-22. This is to aid them in investing back into the business or staff, or help to manage cash flow.
Industry group Master Builders Australia welcomed the news, noting the 370,000 plus building businesses that will benefit from the move.
“This is great news for builders, including the many who are sole traders, and the economy,” Denita Wawn, CEO of Master Builders Australia said.
Wawn pointed out how the quicker tax relief will encourage more industry players to be more active and inject funds in appropriate investments. “Bringing forward small business tax relief for SME builders will motivate them to invest more in their businesses including plant and equipment and training, engage more tradies and train more apprentices,” she said.
This directive builds on the first stage of company tax relief that the government delivered in May 2017
