Small business owners are set to enjoy an ease on tax burdens, confirmed by a recent announcement from Prime Minister Tony Abbott.
From July 1st this year, government will implement a 1.5% cut on the company tax of SMEs.
Such reductions were promised by the Coalition during 2013, however the commitment to small business has angered larger employers, who will not be eligible for a cut.
The Australian Chamber of Commerce and Industry (ACCI) were one of the larger employer groups who condemned the modification in tax for only SMEs.
In a recent statement, ACCI chief executive Kate Carnell indicated that a more profitable move for the economy would be to provide bigger business with the same tax cut.
Ms Carnell said: ‘To follow the Prime Minister’s own economic logic, lower company tax rates for large businesses will, as it will for small business, allow for more investment and growth for business.’
Yet, the government is clearly finally realising the effect that smaller business has on the bigger economy. A report released by Outsource Australia in January revealed that small businesses played a big part in the recovery of the Australian economy by persuading Australians to shop locally and by maintaining steady income to local communities.
‘It is in the interests of all Australians for small business and family enterprises to succeed. As the engine room of our economy, thriving small enterprises are the key to building a strong, more prosperous economy and creating jobs,’ said Bruce Billson MP, Minister for Small Business.
Mr Billson MP referred to the significant opportunities available to Australian small business due to the interest rate cut:
‘For some entrepreneurs, this could contribute to them realising their dream of starting their own business. For existing small businesses, the pass through of the rate cut will free up funds so they can focus on growing.’
The proposed change in company tax will be officially announced in May.
If you enjoyed this article, sign up for a *free* BusinessesForSale.com account to receive the latest small business advice, features, videos and listings directly to your inbox!