Millions of Australians could benefit from budget reforms which aim to lower tax and provide access to tax concessions for small business, according to the government.
“Small and medium businesses are driving jobs growth in Australia and must continue to do so. They are also overwhelmingly Australian owned and more likely to reinvest their earnings in future growth, as they seek to build their businesses,” the Treasurer Scott Morrison said this evening.
“A tax on their businesses is a tax on their enterprise and the jobs they provide,” he said.
As part of a package of changes, the government said that it will extend the unincorporated small business tax discount.
From 2016-17, the discount will be available to businesses with annual turnover of less than $5 million, up from the current threshold of $2 million, and will be increased to 8 per cent. The maximum discount available will remain at $1,000.
From 1 July this year, the small business tax rate will be lowered to 27.5 per cent and the turnover threshold for small businesses able to access it will be increased from $2 million to $10 million.
“This means businesses with a turnover of less than $10 million will also be able to access other tax incentives, including the small business depreciation pooling provisions, simplified trading stock rules, and Pay-As-You-Go Instalments payments option,” Mr Morrison said.
Over the next decade, the discount will be further expanded in phases to a final discount of 16 per cent.
Further support will be provided for small businesses to expand and create jobs. Access to a number of tax concessions will be provided by increasing the threshold for these concessions to $10 million, up from the current $2 million threshold. These changes will benefit more than 90,000 businesses, the government said.