Tax News

Wrapping up tax

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With any major tax initiatives all kicked over to the Tax Working Group for review, unsurprisingly the Budget made no changes to existing tax rates and thresholds. 

No increases in thresholds results in extra tax revenue through the effect of ‘fiscal drag’ whereby individuals pay more tax as their earnings ‘drag’ them into higher tax brackets. 

For the year to 30 June 2018 the fiscal drag effect is calculated as $276 million.  By 30 June 2022, when the total tax take is predicted to rise by almost 25% to over $103 billion, it will be $398 million. 

Have we finally got a solution to the hell that is provisional tax?

Provisional tax has long been contentious and complained about by small business owners. A new cloud-based system has been launched to pay it, but tax consultant Terry Baucher says it could be grounded by the same old problems.

A new tax year started on April 1 and with it came a much-touted new option for taxpayers to pay provisional tax; the Accounting Income Method (AIM).  

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