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Income Tax – changes

As indicated by the Coalition prior to the Federal election, the carbon tax and minerals resource rent tax are going to be repealed. The Government has since released exposure draft legislation repealing these measures from 1 July 2014. Other tax measures that were brought in at the same time are now to be wound back as detailed below:

–          The instant asset write-off amount of $6,500 for small businesses – from 1 January 2014, the instant asset write-off will be reduced back to $1,000;

–          The accelerated deprecation for motor vehicles that is available to small businesses – from 1 January 2014, this will no longer be available;

–          The loss carry-back measure – this measure will only apply for the 2013 income year;

–          The Schoolkids’ Bonus will no longer be available;

–          The increase to the superannuation guarantee charge percentage will be deferred by 2 years so that it remains at 9.25% for the 2014, 2015 and 2016 income years. See the table below for the proposed rate increases over the coming year:

Year Superannuation
Guarantee Charge Rate
From 1 July   2013 9.25%
From 1 July   2014 9.25%
From 1 July   2015 9.25%
From 1 July   2016 9.50%
From 1 July   2017 10%
From 1 July   2018 10.50%
From 1 July   2019 11%
From 1 July   2020 11.50%
From 1 July   2021 12%

The Government will also not proceed with the following personal income tax cuts which were to commence on 1 July 2015:

–          Further increase in the tax-free threshold from $18,200 to $19,400;

–          Increase the income tax rate to 33% (from 32.5%) for the income bracket $37,001 – $80,000;

–          Change to the low income superannuation contribution as it will no longer be available.

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