Having received a 1.5% tax cut in the 2015 Budget, small business are set to receive further tax relief. The 2016 Budget company tax rates for small business will reduce by a further 1% from July 1, to a rate of 27.5%. Furthermore, this tax relief has been extended to medium sized businesses with turnover of between $2m and $10m per annum. This equates to a surprise 2.5% tax reduction for businesses in that revenue bracket.
Additionally, the Turnbull government has outlined a six year plan to progressively increase the revenue threshold until ALL companies in Australia pay a reduced company tax rate (planning for an eventual rate of 25%), which will no doubt be music to the ears of managers and directors across the country.
Whilst many of us expected relief for business, the extent of the longer term plans for relief for all business in Australia, regardless of size, has surprised many. It’s one of just a few budget measures the government has made in what most consider a very safe and underwhelming budget announcement. It’s hardly surprising given the state of affairs in Australia politics of late, particularly given the looming 2016 election.