The Abacus 360 2016/17 Federal Budget Review.
With exciting changes for business and individuals such as a reduction in the company tax rate, a 5 fold increase in the small business turnover threshold and a tax break for those earning between 80 and 87k, we have put together a budget summary to keep you fully informed.
The 2016-17 Federal Budget is a budget of targets – broad targets to boost business and innovation, and the narrow revenue targets of the wealthy and multi-nationals. It’s a big, long-term crafted budget designed to give enough pre-election glow but with structural measures to reign in spending and reduce concessions.
At one end, the Budget contains broad measure to bolster business, investment and innovation including tax cuts and a number of tax measures enabling and freeing up alternate funding and investment sources for business.
At the other end are significant reforms restricting access to superannuation concessions as well as a stronger crackdown on multinationals diverting profits outside Australia.
To police the new revenue measures, the ATO gets an extra $678.9 million to establish a new Tax Avoidance Taskforce.
Plus, the Budget allows for a $1.6 billion “decisions taken but not yet announced” election war chest.
- Company tax rate reduced to 25% over 10 years
- Increase in tax discount for unincorporated small business to 16% over 10 years
- Small business entity threshold increase to $10m from 1 July 2016
- $1k GST exemption on imported goods abolished from 1 July 2017
- UK style diverted profits tax to reign in multinationals
- $500,000 lifetime non-concessional contributions cap from Budget night
- Reduction in concessional contribution cap from 1 July 2017
- Tax exemption on earnings supporting transition to retirement income streams (TRIS) removed from 1 July 2017
- 30% tax on super contributions of high income earners extended
- Tax free super balances capped at $1.6m from 1 July 2017
- 32.5% personal income tax threshold increase to $87,000 from 1 July 2016
- Subsidies to create employment path for unemployment youth
- $678.9m ATO anti-avoidance taskforce
- Tobacco excise adds $4.7bn