The 2018 budget will cause mixed reactions for business, although overall businesses will be looking at tougher measures. The Government still plans to allow for a 25 to 30 per cent decrease in company tax over 10 years, although this measure is currently being stalled in the Senate.
Treasurer Scott Morrison has emphasised the Budget’s focus on making taxes lower and fairer while cracking down on tax evasion. Measures are being taken against the black economy – businesses which capitalise on using cash to under-report revenue.
Cash payments above $10,000 made to businesses for goods and services will be made illegal from July 1st 2019 as part of an attempt to reduce cash-in-hand practices.
By following the recommendations of the Black Economy Taskforce, the Government hopes to raise $5.3billion over the next four years.
Businesses’ stricter report requirements to the Australian Taxation Office (ATO) are being implemented, including payments to road freight transporters, security providers, and computer system design services. This measure is expected to raise $550million.
The Government is investing $319million into the ATO’s investigation into the black economy, including initiatives such as a hotline for individuals to report cash-in-hand activity and phoenixing. $2.5billion is expected to be raised from such measures.
The possibility of taxing digital revenue flows is also being further investigated, in an attempt to target foreign multinational companies.
Aside from stricter requirements, small businesses will benefit from a continuation of the $20,000 tax write-off until June 2019. This is expected to cost $350million.
Businesses that employ older workers can also potentially benefit from wage subsidies up to $10,000.
The medical industry will benefit, with $1.3billion being invested into the Medical Industry Growth Plan. The Government will also refocus their efforts to encourage research, science and technological development by scaling back the tax incentive, but investing $2.4billion into industry over a dozen years.
