The ALP don’t appear to be scared to take some radical tax changes to the next election.
Today they announced removing the ability to get excess imputation credits refunded… There will be some very unhappy SMSF and retirees (and charities) who get lots of cash each year from the ATO in the form of refunded imputation credits.
But that is nowhere near all they want to change… and isn’t it funny that all the changes raise taxes…
- Removing the ability to get excess imputation credits refunded;
- They want to remove negative gearing deductions that can be applied against PAYGW income on all assets except new residential property;
- They want to reduce the CGT discount to 25%;
- They want to introduce a minimum 30% tax on discretionary trust distributions;
- They want to limit the 27.5% company tax rate to Small Business Entities (turnover less than $10m);
- They want to limit deductions for tax advice to $3,000 for non business entities;
- Decrease the threshold at which the Division 293 tax applies to $250,000;
- PERHAPS add back the temporary budget levy to get the highest marginal tax rate to 49% (I doubt they will actually do this); and
- Changes to large business taxation like removing the safe harbour rule from thin capitalisation so that businesses can only use the worldwide gearing ratio, change the MEC rules for consolidated groups, reduce the public reporting rules for private companies from $200 million to $100 million, and make the country by country transfer pricing documentation publicly available.
Still more than a year to the election, which it looks like the ALP will win with a comfortable majority, and this will be our new tax system from possibly 1 July 2019…