SME tax cuts proposed by Greens
SMEs often lack the resources that larger companies depend on for success, requiring a unique approach to business to achieve success.
Compliance is one of the main areas where SMEs can struggle due to the costs imposed by meeting regulations and the investment of time required. A new proposal to grant tax cuts to SMEs could support stability and encourage growth for the affected businesses.
The proposal has been backed by the Greens and is expected to impact the 2 million SMEs active within Australia. The main point of the plan is to provide a 2 per cent tax cut for small business, which would see a reduction in operating costs. SMEs may want to consider consulting a tax accountant to assess how they may fare if the changes are implemented.
Other propositions include raising the threshold for an asset write-off to $10,000 and reinstating a loss carry-back provision.
While the plan is currently also supported by the Australian Chamber of Commerce and Industry (ACCI), further backing from other parties will be necessary to give it the best chance of being implemented.
"The Greens' support for these measures should send a message to other parties as they formulate their positions on these issues that are important to small enterprises. Small businesses are the engine room of the economy, and we need to make sure they have the fuel they need to power ahead," said ACCI CEO, Kate Carnell.
These changes in particular provide mixed news for unincorporated small business, which make up approximately 70 per cent of all SMEs around Australia. As it stands, they are likely to miss out on the proposed tax cut. However, they will still be able to benefit from the increased asset write-off threshold and loss carry-back provision.
The proposal expands on the 1.5 per cent tax cut promised by the Abbot government earlier this year.