Business leaders will face tough decisions over how they respond to new rules under the Turnbull government’s tax reforms.
Key points: It will affect businesses from the petrol and diesel sector to small businesses, retail and hospitality sectorsThe rules will cost more than $2 billion a yearThe Government says the changes are needed to boost the economy, reduce the tax bill and boost competitivenessKey points:The changes will affect the petrol-and-diesel industryThe Government has proposed to give businesses and investors a 15 per cent tax cut over five years, which is a reduction of about $2.5 billion a monthThe changes are due to come into force from March 1 and will see businesses pay a 15% tax rate for three years.
That is a 15-per-cent tax cut for the industry that employs about 11,500 people.
For businesses in the diesel-based industry, the new rules mean their taxes will increase by $3.6 billion a day.
For those in the petrol industry, they will see a 12.5 per cent rate reduction, which will cost $2 million a day over the same period.
Mr Turnbull said the changes would be “huge” and that they would have a “huge impact” on business.
“We will do everything we can to ensure they’re a fair tax deal for all, not just a small handful of small businesses,” he said.
The Government is calling the new tax rules a “historic” change and says it is needed to help businesses grow.
“For the first time, a government will have a tax system that is truly based on the needs of the economy and not on the profits of multinationals,” the Government said in a statement.
“The changes make it easier for small businesses to thrive, create jobs and grow their businesses.”
But the changes have also been criticised for hurting small businesses and those that rely on the small-business tax deduction.
“This new tax will cause the small business owner to lose a significant amount of money every year,” said John Grant, CEO of the Australian Chamber of Commerce.
“It’s an unfair tax on small businesses.”
Mr Grant said the tax changes will also impact small business owners, which the Government says are responsible for up to 90 per cent of its business growth.
Mr Grant says the tax change will “push small businesses out of business” and will leave many smaller businesses without a tax source.
He said this will mean that “small business owners are going to be left holding the bag”.
“It will be a huge drag on the Australian economy,” he added.
Topics:business-economics-and,tax,business-news,tax-policy,federal-government,government-and/or-politics,government,business,finance,corporate-governance,government—business-group-institute,taxation,federation-elections,government–news,canberra-2600,act,australia,newcastle-2300,southport-4215,vic,brisbane-4000,vic—southport,vic–austRALIA,newlands-4305First posted November 19, 2020 07:00:01Contact Sarah DaleyMore stories from New South Wales