On Tuesday, 29 March 2022, Treasurer Josh Frydenberg handed down the 2022-23 Federal Budget.
The Budget offers new incentives for SMEs which rewards skills, training and digital adoption. Meanwhile, big businesses now have the broadened scope of the concessional tax treatment of what is termed patent box income and the extended operation of the ATO’s Tax Avoidance Taskforce to consider.
Economic outlook
Mr Frydenberg said economic growth forecasts have been revised upwards, driven by stronger-than-expected momentum in the labour market and consumer spending. The unemployment rate has also fallen to 4%, and is expected to reach 3.75% in the September 2022 quarter.
Since the Mid-Year Economic and Fiscal Outlook (MYEFO) in December 2021, the underlying cash
balance has improved by $103.6bn over the 5 years to 2025-26. Nevertheless, the Government is
expected to record a deficit of $79.8bn for 2021-22 and $78.0bn for 2022-23 (down from $134.2bn in 2020-21). Net debt of $714.9bn for 2022-23 is forecast to rise to $864.7bn in 2025-26.
Tax-related measures in the Federal Budget
The major tax-related measures announced in the Budget include:
- LMITO increased by $420 for 2021-22
- Personal tax rates
- Small business 20% deduction boost: skills training and digital adoption
- Patent box income extension
- Employee share scheme
- Carbon credit and biodiversity certificate income
- Digitalising trust income
- PAYG instalments option
This expertly written report is brought to you by the Thomson Reuters Tax Division for the Weekly Tax Bulletin. Download your complimentary issue via the form on this page.
