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The Morrison Government is promising to fast-track its legislated tax cuts for small and medium-sized businesses, costing $3 billion and setting up a fresh battle with Labor ahead of the next election.
The tax rate for companies with a turnover of up to $50 million has already been reduced from 30 to 27.5 per cent and is scheduled to drop to 25 per cent by 2026/27.
The Coalition now wants to bring those tax cuts forward so that the plan is fully implemented by 2021/22, five years earlier than expected.
Treasurer Josh Frydenberg said the cost to the budget would be $3.2 billion over four years which had been partially offset by the Coalition’s decision to dump its big business tax cuts.
“Three million Australian businesses, employing around 7 million people will pay less tax and see the benefits sooner as a result of this announcement,” he said.
Having ditched its $36 billion corporate tax cut plan, the Coalition’s new plan is to lower the tax rate for small and medium businesses to 26 per cent in 2021 and then to 25 per cent the following year.
Figures released by the Government show a business that makes $500,000 a year would get to keep an extra $12,500 by the time the fast-tracked tax plan is fully rolled out.
Mr Frydenberg said the legislation would be introduced into Parliament in the next fortnight and claimed it would be a “real test” for Opposition Leader Bill Shorten.
“We know he already wants to rip up our legislated tax relief and make each one of those 3 million small businesses pay more than they have to,” he said.
If the plan passes Parliament, the two major parties will likely go into the next election with rival company tax policies.
Labor wants to keep the tax rate for small and medium-sized businesses at the current level of 27.5 per cent while maintaining a big business tax rate of 30 per cent.
Topics: business-economics-and-finance, tax, government-and-politics, scott-morrison, budget, australia
