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12th April, 2022

Tax relief for small businesses means they have more money to take on an extra worker, offer an extra shift or buy a new piece of equipment.

The Government will deliver more than $21 billion in tax cuts to small businesses from 2015-16 to 2024-25, with around $2.6 billion flowing in 2022-23.

This includes lowering the company tax rate for small businesses to 25 per cent from 1 July 2021, a reduction from the previous tax rate of 30 per cent since 2013-14. This 25 per cent tax rate is the lowest level in 50 years.


The Government is providing $1.0 billion for a new Technology Investment Boost to encourage small businesses to go digital.

Small businesses with annual turnover less than $50 million will be able to deduct a bonus 20% of the cost of expenses and depreciating assets that support digital uptake. This includes portable payment devices, cyber security systems or subscriptions to cloud-based services. The boost will apply to eligible expenditure of up to $100,000 per year, incurred from Budget night until 30 June 2023.


Small businesses will also have access to a new 20 per cent bonus deduction for eligible external training courses for upskilling employees. The Skills and Training Boost will apply to expenditure incurred from Budget night until 30 June 2024, providing $550 million in tax relief.


The Government will leverage new technology and update systems to automate tax reporting requirements. This will allow companies to calculate their Pay-As-You-Go (PAYG) instalments based on current financial performance, extracted from business accounting software, with some tax adjustments. Not only will this be a boost to reducing compliance burdens, but in some cases, this may mean that companies may be able to get an automatic refund of PAYG instalments where financial performance declines. 

New systems will also be developed to ensure all trusts have the option to lodge their income tax returns electronically, which will reduce errors and processing time and create capacity to pre-fill beneficiaries’ tax returns. New systems are expected to be in place by 1 July 2024.


The GDP uplift rate that applies to PAYG and Goods and Services Tax (GST) instalments will be reduced from 10 per cent to 2 per cent for the 2022-23 year.

This will result in lower instalments for 2.3 million small to medium businesses and sole-traders (up to $10 million annual aggregated turnover for GST instalments and $50 million annual aggregated turnover for PAYG instalments) and individuals with passive income that are eligible to use the GDP adjusted instalment amount method.

The new GDP uplift rate will apply to instalments that fall due after the enabling legislation receives Royal Assent.

Source: page 15


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