There was some good news for taxpayers in the 2018/19 Federal Budget. Below are some highlights for individual taxpayers.
Firstly, the Government will, over time, scrap the 37% tax bracket. A seven-year plan, commencing 1 July 2018, will see (among other measures) personal tax brackets widen and the top threshold of 32.5% eventually increasing from $90,000 (2018/19 tax year) to $200,000 (effective 1 July 2024). This will result in a saving of up to many thousands of dollars for some taxpayers.
A new Tax Offset of up to $530 p.a. has been introduced for Australian resident low and middle income taxpayers for the 2018-19, 2019-20, 2020-21 and 2021-22 income tax years (in addition to the Tax Offset of up to $445 p.a. for low income earners). This will result in a combined offset of up to $975 per year for some taxpayers from 1 July 2018.
The current Medicare levy rate remains at 2% and will not increase in 2019 contrary to what was announced last year by the Government. The Medicare levy low-income thresholds for singles, families, and seniors and pensioners will increase from the 2017-18 income year in line CPI.
The Government also introduced an economy wide cash payment limit of $10,000 which will apply to all goods and services from 1 July 2019 as part of a ‘black economy’ crackdown.
Other budget measures impacting individuals will make craft beer cheaper but cigarettes more expensive!
Of course, if you are interested in the detail or would like to see PwC’s expert analysis of the many other announcements, please follow the link below: