Small business plans will soon be rebranded to reflect their impact on small business, as the Australian Taxation Office (ATO) prepares to release its “small business strategy”.
The ATO said it would also review its policies and procedures for the new term, including a review of how small businesses plan their future, as well as an assessment of whether any of the “small” businesses it has identified in the past have already achieved their objectives.
“This is a critical step in ensuring the tax base is secure and growth will continue to be a priority for small businesses,” ATSO Chief Economist Steve Baskin said.
“The ATOs Small Business Tax Planning Program has already provided tax relief to many of our small businesses, but now we will be able to provide more certainty and support for businesses looking to grow.”
The ATo will be releasing the first draft of its tax reform policy, known as the Small Business Plan, to the public next week.
Under the plan, small businesses will be allowed to increase their corporate tax rate to 17.5 per cent from the current 12.5, which is due to increase to 18 per cent by 2021.
The ATos tax plans are set to cost the budget $2.4 billion over four years, or $1.5 billion in the first five years.
In the past, the ATO has been a critic of the government’s proposed changes to corporate tax, saying they could lead to higher corporate tax rates.
Under those changes, the tax rate would be reduced from 12 per cent to 7.5 and the company’s profits would be taxed at the lower rate of 13 per cent, which would increase to 14 per cent when the tax cut is extended to 2027.
The ATs plan, which the government says will “significantly reduce the amount of money spent on corporate tax”, also includes new rules for foreign investors, and a review that will see more than 500,000 small business plans reclassified from “small”, “smaller” or “unincorporated” to “small”.