Stand out issues of the Henry Review.
Australia’s Future Tax System Review (AFTS), most commonly known as the “Henry Review” was released on 2 May 2010. The focus of the AFTS is a new Resource Super Profits Tax (RSPT) and the government intends this to be the first step in a ten year tax reform agenda.
The Australian Government’s aim is to:
- generate more superannuation savings for working families;
- lower tax for all companies, especially small businesses; and
- invest in Australia’s future infrastructure needs, particularly for mining states.
A number of proposals relating to company and small business taxes and superannuation have also been accepted by the government, although the delivery of these changes is reliant on the execution of the RSPT. The AFTS made 138 recommendations, some were specifically accepted and some purposefully rejected. Some areas have been flagged for future reform, however many were not discussed during the government’s response.
The stand out issues of the Henry Review include:
- RSPT will be introduced on 1 July 2012 at a rate of 40% on profits made from Australia’s non-renewable resources.
- The states and territories will be provided with new, ongoing infrastructure funding, with an initial total amount of $700m in 2012/13.
- A refundable resource exploration rebate will be provided to companies, set at the prevailing company tax rate, for exploration expenditure carried out in Australia from 2011/12.
- The company tax rate will be reduced to 29% from 2013/14, and to 28% from 2014/15.
- The company tax rate for “eligible small business companies” will be reduced to 28% from 2012/13.
- The immediate write-off for assets of small businesses will be extended to assets valued at less than $5,000 from 1 July 2012.
- The superannuation guarantee charge (SGC) will be increased by annual increments until it reaches the plateau level of 12% by 2019/20.
- The entitlement to the SGC will be broadened by lifting the maximum age threshold from 70 to 75 years of age.
- The concessional contributions cap will be raised to $50,000 per year for workers who are 50 and over and who have superannuation balances of under $500,000.
- A new government superannuation contribution will be created which will pay up to $500 for workers with adjusted taxable incomes of up to $37,000.
Here at The Quinn Group we can help to answer any of your questions regarding Australia’s Future Tax System Review. For any queries regarding this or any other tax related issues click here to submit an online enquiry. Call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.