2019/2020 Budget Tax Changes
Federal Treasurer Josh Frydenberg’s promised a surplus of A$ 7.1 billion, tax cuts and additional funding for infrastructure and services to regional Australia in 2019/20. Frydenberg stressed several times that, while announcing lower taxes for 10 million people and three million small businesses, expenditure would be achieved without increasing taxes.
The Treasurer announced a $158 billion reduction in personal income tax by more than doubling the low-and middle-income offset for 2018/19. Over 10 million people earning up to A$ 126,000 a year will benefit from this.
From July 2024, Frydenberg says the government will cut the marginal tax rate of 32.5 per cent to 30 per cent, which will apply to all taxpayers earning between A$ 45,000 and A$ 200,000.
The instant asset write-off will be extended from A$ 25,000 to A$ 30,000 until June 2020. The write-off allows small businesses with a turnover of less than A$ 10 million to claim an immediate deduction for a purchase below that amount. This will be expanded to businesses with turnover up to A$ 50 million, or another 22,000 businesses.
Companies can also claim the deduction when they make a purchase under the cap. The write-off is still a yearly deduction. CPA Australia called for the write-off to be made permanent rather than extended budget to budget, in order to give greater certainty to business owners when planning.
In order to allow further consultation, the government will defer the start date of the proposed amendment to Division 7A of the Tax Act to July 2020.
