The government’s decision to increase the instant asset tax write-off from $5000 to $6500 has been welcomed by accountants. The question now lies on how SME’s will be able to cope with the increase.
This increase has been seen by Gavan Ord, business policy adviser for CPA Australia, as a step in the right direction.
“It’s moving towards the Henry recommendation of $10,000,” said Ord.
This increase has been seen by Gavan Ord, business policy adviser for CPA Australia, as a step in the right direction.
“It’s moving towards the Henry recommendation of $10,000,” said Ord.
This increase by the government is part of its move to make the companies that belong to Australia’s Top 500 most polluting pay a carbon price of $23 per tonne from July next year. Before an emissions trading scheme is introduced, this carbon price will be increasing by 2.5 per cent a year for three years.
A $6500 instant tax write-off for assets purchased later than July 1, 2012 will be accessed to companies with a turnover of less than $2 million a year. This was according to the plans released yesterday.
The decision to replace the Entrepreneurs Tax Offset with an instant tax write-off of $5000 in the May federal budget was followed by the said announcement.
“This could provide a tax benefit of $1800 (assuming a marginal tax rate of 30 per cent) in the income year the cafe owner first uses the freezer or has it installed,” the government said.
Business Minister, Bruce Billson, has doubts on the points of the plan stating that the increased cost does not balance the benefit.
“Even under the Government’s own example a cash-strapped café owner would need to find $6000 for some new equipment to receive a one-off earlier tax benefit of $1800. The café owner will still need to fund ongoing higher energy costs and more expensive stock and ingredients,” Billson added.
Robert Jeremenko, senior tax counsel at the tax institute, has the same question as the accountants. That is how the SME’s are going to cope with the increase.
“Big businesses will have relatively better bargaining power,” he said.
“If costs are trapped within small business I imagine we’ll start to hear about whether this is what the Government has intended. But the write-off increase is good news – it’s better to be increasing it than decreasing,” he added.
For Paul Drum, CPA Australia business and investment policy head, the increase is good news especially now that there’s nothing much one can get from $5000.
“It’s not profound or a show-shopper and it’s not a rebate either. But we don’t want to denounce it because it’s appropriate policy,” he said.
Source: SmartCompany.com.au »
You may also Like Us on Facebook, Follow us on Twitter and Follow us on Google+ for more Updates.
A $6500 instant tax write-off for assets purchased later than July 1, 2012 will be accessed to companies with a turnover of less than $2 million a year. This was according to the plans released yesterday.
The decision to replace the Entrepreneurs Tax Offset with an instant tax write-off of $5000 in the May federal budget was followed by the said announcement.
“This could provide a tax benefit of $1800 (assuming a marginal tax rate of 30 per cent) in the income year the cafe owner first uses the freezer or has it installed,” the government said.
Business Minister, Bruce Billson, has doubts on the points of the plan stating that the increased cost does not balance the benefit.
“Even under the Government’s own example a cash-strapped café owner would need to find $6000 for some new equipment to receive a one-off earlier tax benefit of $1800. The café owner will still need to fund ongoing higher energy costs and more expensive stock and ingredients,” Billson added.
Robert Jeremenko, senior tax counsel at the tax institute, has the same question as the accountants. That is how the SME’s are going to cope with the increase.
“Big businesses will have relatively better bargaining power,” he said.
“If costs are trapped within small business I imagine we’ll start to hear about whether this is what the Government has intended. But the write-off increase is good news – it’s better to be increasing it than decreasing,” he added.
For Paul Drum, CPA Australia business and investment policy head, the increase is good news especially now that there’s nothing much one can get from $5000.
“It’s not profound or a show-shopper and it’s not a rebate either. But we don’t want to denounce it because it’s appropriate policy,” he said.
Source: SmartCompany.com.au »
You may also Like Us on Facebook, Follow us on Twitter and Follow us on Google+ for more Updates.
Posts
0 Comments Received
Leave A Reply