Important changes in Tax Policy

contributed by Rafael Amoranto

The following are tax changes that the Government previously announced but not going ahead and other measures previously announced and proceeding. This will apply to individual taxpayers and small business owners as follows.

Changes that [were] previously announced but NOT going ahead:

Company tax cut not proceeding

The Government will not proceed with the measure to lower the company tax rate from 2013/14, nor implement an early start to the company tax rate cut for small business from the 2012/13 year.

50% tax discount for interest income not proceeding

The Government will not proceed with the 2010/11 Budget measure to introduce a 50% discount for interest income, which was due to commence on 1 July 2013.

Standard deduction not proceeding

The Government will not proceed with the 2010/11 Budget measure to introduce a standard deduction for work related expenses and the cost of managing tax affairs, which was due to start on 1 July 2013.

Other measures previously announced and proceeding:

Replacement of the Entrepreneurs Tax Offset (ETO) with better incentive for small business

The Government will replace the ETO with simpler and more effective measures. The Government will allow small businesses to instantly write off each and every business asset costing less than $6,500 that is purchased from 1 July 2012. introduce an immediate deduction for the first $5,000 of the cost of a motor vehicle purchased from 1 July 2012.

Modernising the taxation of trust income

The Government will consider options which ensure that business and individuals can continue using trusts with confidence, and that the tax outcomes applying to their circumstances are fair and consistent.

Increasing the Superannuation Guarantee rate from 9% to 12%

As previously announced, the Government will boost retirement savings by progressively increasing the rate of the superannuation guarantee from 9% to 12%. — (Financial Genius)

Updated: 07/02/2012 — 02:48:55