Source: Accountants Daily
Treasury Laws Amendment (2021 Measures No. 4) Bill 2021 was introduced to the House of Representatives on Wednesday and contains two tax measures included in the Morrison government’s 2021–22 federal budget.
The first of them is the government’s FBT exemption, which will provide employers with a way out of the tax if they offer soon-to-be redundant staff with training or education for the purposes of helping them find new work.
The measure would backdate the exemption to eligible employers from 2 October 2020. It’s estimated to result in a compliance saving of $1.1 million over the next 10 years.
The bill also brings Treasurer Josh Frydenberg’s extension of the low and middle income tax offset (LMITO) to the house.
It is set to cost the government $7.8 billion over forward estimates until the end of the 2023–24 financial year.
The LMITO provides individuals with taxable incomes between $48,000 and $90,000 with a maximum offset of $1,080. Taxpayers earning less than $37,000 will see a benefit of up to $255.
Those earning between $90,000 and $126,000 will see the offset phase out at a rate of 3 cents a dollar.
“This is more money to spend in local businesses, giving them the confidence to take on an extra worker, offer an extra shift or buy a new piece of equipment,” Mr Frydenberg said, unveiling the extension as part of his government’s federal budget.
The extension of the LMITO for a further 12 months comes after the government announced a similar extension in its October federal budget last year despite backdating its stage 2 tax cuts to 1 July 2020.
Mr Frydenberg stressed that the extension of the offset was a product of the state of the current economy and should not be viewed as a permanent feature of the tax system.
“I want to make it very clear that this year’s LMITO is designed as a stimulus measure,” he said.
“It is not a permanent feature of the tax system; it is designed as a stimulus measure because we are not out of the pandemic yet and we need to boost aggregate demand as we did last year.”