Highlights of the Australian Federal budget 2018-19
Personal Income Tax Plan
A new offset for low and middle income upto a maximum of 530 pa introduced; This offset will be received as a lump sum on assessment after individuals lodge their tax returns.
Medicare Levy stays at 2% for now (2.5 was proposed but not passed)
32.5% tax bracket to raised to $90,000 (earlier $87,000) from 1 July 2018 – with plans to increase it upto 120k by 2022-23.
By 1st Jul 2024 individual tax bracket to be topped at 32.5 for most Australians (37% bracket to be abolished).
Business Support
20k Assets instant writeoff extended till 30th June 2019 (Was planned to expire on 30th June 2018)
Deductions for expenses associated with holding vacant land not genuinely used to earn assessable income will be denied.
Dis-allowance of PAYG not paid in time for employees (Single Touch Payroll will be the trigger.
Circular distributions tax avoidance provisions now apply to family trusts.
Director penalty regime expanded to include GST, Luxury car tax and Wine equalisation tax; Lodgement and payment of BAS in time is not crucial.
Prevent directors backdating resignations improperly to avoid prosecutions.
Digital businesses to pay tax in Australia by extending GST to Australian hotel bookings made via offshore digital businesses.
Superannuation Simplification
ATO authorised to re-link lost super to avoid additional fee burden.
SMSF members raised to 6 from 1st Jul 2019.
SMSF with a good record may have 3 years audit cycle this will reduce compliance cost – but it remains to be seen how compliance will be affected.
Effective 1st July Insurance included in superannuation to be opt-in for certain accounts.
Low Fund balance to attract a max cap of 3% fee to reduce burden.
Fund exit fee to be banned to help consolidation.
Australians Aged between 65-74 where super balance is below 300k will be exempted for the work test to boost their super (first year).
Compliance focus of the Australian Federal Budget 2018
130.8 M to be provided to ATO for Targeting individual tax payers and their agents who assist in avoidance of tax.
Taxable payments reporting to be extended wef 1st Jul 2019 to security, road freight transport and computer system design industries; courier and cleaning already added wef 1st Jul 2018.
Economy wide cash payment of 10k to limit black economy wef 1st Jul 2019.
Additional funding to TPB to tackle the black economy.
CenterLink Fraud detection and debt recovery to bring in 300 Million.
Immigration Changes for Welfare.
From 1 July 2018, new migrants will have to wait four years instead of three before they can access certain welfare benefits.
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Full Details of The Australian Federal Budget 2018-19 can be found at https://www.budget.gov.au/2018-19/content/overview.html