Tuesday, September 4, 2018
Australia's new Prime Minister has said his Government is working on plans to help improve the tax competitiveness of small businesses.
Former Treasurer and now Prime Minister Scott Morrison had been at the forefront of the Government's two-year battle to pass a package of company tax cuts. He had sought to increase the turnover threshold for access to the small business tax rate and to reduce the headline rate to 25 percent for all firms by 2026. In August, the Senate rejected the Government's proposals, despite a last-minute offer by the Government to exclude the big banks from the lower rate.
Morrison told reporters that he respected the Senate's decision. His Government "will not be taking the full Enterprise Tax Plan forward that we presented to the Parliament."
However, Morrison did add that his Cabinet will be "bringing forward a new competitive tax plan for small- and medium-sized businesses."
Last year, Morrison succeeded in passing legislation to lower the SME rate from 28.5 percent to 27.5 percent from the 2016-17 tax year. The legislation also increased the ceiling turnover for the rate from AUD2m (USD1.5m) to AUD10m for 2016-17, to AUD25m for 2017-18, and to AUD50m from 2018-19.
The headline company tax rate is 30 percent.