With the second release of the Federal Budget, people are scrambling online to find out who the real Winners and Losers are this time around.
Here are some of the more interesting things we’ve found:
Small Business FTW!!
Being labelled as a “Boss’ Budget”, small businesses come out as winners here.
Unincorporated businesses can receive a 5% tax discount, and Companies can expect a 1.5% company tax cut.
The icing on the cake is the fact small to medium enterprises (turnover under $2m) will be able to claim unlimited tax deductions for items under $20,000!
This means new cars, vans, equipment, machinery, software and so on will be 100% tax deductible!
This is a great time for Business Operators to invest, grow and hire more staff! Small businesses, sole traders and those starting a business will enjoy tax breaks, less red tape and accelerated asset depreciation.
A Uniform Alcohol Tax
Currently, different types of Alcohol are taxed at different rates. This Federal Budget will see all Alcohol charged the same standard tax rates per standard drink; and this is receiving mixed reviews from Alcohol retailers.
Mitchell Taylor, of the Winemakers Federation of Australia, said a flat tax on alcohol would not be fair. “Most of the Australian wineries at the moment are barely breaking even,” he said. “Most of them are not profitable. But this would really plunge all of them into the deep red. Half of Australian winemakers would probably have to close down overnight”.
On the flip side, Tim Salt, Managing Director of Diageo Australia (responsible for Johnny Walker, Captain Morgan, Smirnoff, Baileys and Guinness), said “All alcohol products should be taxed at the same rate because alcohol is alcohol regardless of what form it comes in. The breathalyser doesn’t discriminate between beer, wine and spirits so why should the taxman?”.
So regardless of which side of the fence you sit on regarding this issue, retailers are in for a change.
The Netflix Tax
This has been in the pipeline since April and (assuming legislation is passed) will go into effect from 1st July 2017.
In a nutshell, the Government will start applying the 10% Goods and Services Tax (GST) to Digital Products and Streaming Services. Prices on iTunes, Q.SIC and Google’s Play Store already take GST into account, so users won’t notice a difference there.
A positive of this tax is that it will make many Australian Digital Content providers become more competitive, resulting in lower fees for the Australian public.
The Netflix Tax is estimated to generate $350 million in revenue for the Government.