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Small business accountants letting you know about the company tax rate changes

As business accountants in Surry Hills we thought we would let you know that as of last week the Treasurer, Wayne Swan, released draft legislation to reduce company income tax rates for business from 30% down to 29%, effective from 1 July 2013. This ties in with the Mineral Resources Rent Tax (MRRT) and serves the rather noble purpose of re-allocating some of the tax burden onto the super mining companies and away from the rest of the business economy. The small business sector has a head start on this with the company tax rate for small businesses to be reduced to 29% one year earlier, commencing from 1 July 2012.

My previous blog also outlined other measures in terms of accelerated depreciation measures for small business, designed to encourage investment in capital equipment, thus driving higher productivity for the long term benefit of the economy. It is estimated by the Treasurer that up to 720,000 small businesses will benefit from these changes.

Of course, the Treasurer has only highlighted the aspects of this draft legislation that suit the Government. The fact of the matter is that many small businesses are currently struggling to turn a clear net profit in a stagnating economy, especially retail and construction businesses. So with little profits to speak of, the small businesses that need the most relief may not benefit. With banks tightening lending criteria for small business they may also find it difficult to raise the necessary finance to invest in new equipment. As a small business owner, if you have established your business structure in anything other than a proprietary limited company these change will be of no benefit to you.

I am certainly not advocating that the draft legislation won't benefit small business, I'm sure many will ultimately benefit, it's just that there are so many other taxes and duties and areas of red tape that would better serve small business if they were reduced or eliminated. Namely state land taxes, payroll taxes and the onerous amounts of red tape required to set up and operate a small business just to name a few. Let's hope that these matters also receive the attention they deserve, sooner rather than later.

Small business deserves nothing less therefore as your small business accountants in Sydney please do not hesitate to contact us for any further information.

 
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