Small business hit by Labor’s 25% tax increase
5th January, 2012
The region’s smallest businesses face a 25% income tax hike from 1 July 2012 following the abolition of the Entrepreneurs Tax Offset (ETO) by the Gillard Labor Government, Federal Member for Wide Bay Warren Truss said today.“Self employed semi-retirees, home-based businesses, start-ups and small retailers are just some of the micro businesses that will be hit hard by the 25% tax increase,” Mr Truss said.
“The ETO is being abolished as part of the Gillard Labor Government’s new mining tax legislation. It has nothing to do with mining, but the changes whacks the smallest businesses harder than big miners.
“Under the changes, approximately 425,000 Australian businesses with incomes between $30,000 and $65,000 will face a $10 a week or $500 per year tax increase.”
The ETO was introduced by the former Coalition Government to support small business, providing a 25% tax offset on annual income tax liability on turnover up to $50,000 phasing out at $75,000 turnover. It is worth between $150 million and $180 million to small business.
“In an economy where confidence is low and business is doing it tough, business people need greater support and encouragement from Government. Instead, Gillard Labor is taking away an important incentive, which will make it harder for small business people to make ends meet,” Mr Truss said.
“Labor’s uncoordinated and contrary policies are bad for business and the economy. The Government on one hand says it needs a new mining tax to fund a slight reduction in the company tax rate, yet Labor’s mining tax has led to the termination of a tax offset that will now make small business worse off.
“If Labor hadn’t blown the surplus, squandered the savings and pursued ill-conceived taxes which collect less than they spend, they would not need to target small business this way.
“We need policies and economic settings which strengthen small business, not tax hikes that threaten their existence,” Mr Truss said.
