Friday, April 5, 2019
Australian Treasurer Josh Frydenberg has announced that the Government will bring forward the start date for its package of income tax cuts.
Frydenberg delivered his 2019 Budget on April 2. He said that the Government wants Australians "to earn more and to keep more of what they earn."
Under the current system, no tax is charged on the first AUD18,200 (USD12,841) of income. Income up to AUD37,000 is taxed at 19 percent; income up to AUD90,000 is taxed at 32.5 percent; income up to AUD180,000 is taxed at 37 percent; and income over AUD180,000 is taxed at 45 percent.
The Government will increase the low- and middle-income tax offset, providing tax relief of up to AUD1,080 for individual income taxpayers or up to AUD2,160 for dual-income families. The offset will be available for the 2018-19, 2019-20, 2020-21, and 2021-22 income years.
In 2022-23, the top threshold for the 19 percent tax bracket will be increased from AUD41,000 to AUD45,000. The low-income tax offset will be increased from AUD645 to AUD700.
In 2024-25, the 32.5 percent tax rate will be reduced to 30 percent. The 37 percent tax bracket will be abolished.
Frydenberg said: "This will cover all taxpayers earning between AUD45,000 and AUD200,000 and will mean that 94 percent of taxpayers will pay no more than 30 cents in the dollar."
Frydenberg added: "Following these changes, our tax system will remain highly progressive. With the top five percent of taxpayers paying one third of all income tax collected. And someone earning AUD200,000 paying 10 times as much tax as someone on AUD45,000."
The 2019 Budget also included proposals to increase the instant asset-write off threshold as of 19:30 AEDT on Budget night, from AUD25,000 to AUD30,000. The write-off will also be expanded to businesses with an annual turnover of up to AUD50m. The threshold applies on a per asset basis.