Taxpayers Receive A Pay Rise – Tax Cuts Passed In Parliament
The Coalition’s promised tax cuts passed through both houses of Parliament last week, marking the beginning of a $158 billion tax plan to be implemented over several years. These cuts were one of the key planks of the Liberal’s federal election campaign several months ago.
The new tax rates will see many taxpayers eligible for a $1,080 offset in their 2019 income tax return, with this change already resulting in a sharp increase in early tax return lodgements.
The second stage of the tax cuts will see the $1,080 offset doubled for most workers by 2022-23 (but paid over the course of the year rather than in a lump sum), with the final stage of the plan, to be implemented from 2024-25, resulting in all taxpayers earning between $45,000 and $200,000, to be on a flat tax rate of 30%.
For a taxpayer earning $80,000, the tax cuts will result in tax reductions of $1,080 per year from 2019 onwards, up to $1,955 per year from 2025 onwards. A taxpayer earning $120,000 will receive an additional $315 per year from 2019, $2,565 per year from 2023, and a healthy $4,440 per year from 2025 onwards.