Carbon tax announced, plus other important tax changes
Carbon tax announced, plus other important tax changes
The Government has announced the details of its carbon pricing package (often referred to as the ‘carbon tax’).
Under this package, around 500 of Australia’s biggest polluters will be required to pay $23 for each tonne of carbon pollution from 1 July 2012 (with the price rising by 2.5% a year during a three-year fixed price period until 1 July 2015, when the carbon price mechanism will transition to an emissions trading scheme).
The Government also announced other tax changes, including compensation being offered to households and small businesses, such as:
- increasing the tax free threshold, reducing the low income tax offset (LITO) and tinkering with the tax rates to provide general tax cuts (the main benefit of the tax cuts will be directed to low income earners – see below);
Current (2011/12) tax rates and thresholds*
Taxable Income |
Tax Payable |
|---|---|
0 – $6,000 |
NIL |
$6,001 – $37,000 |
15% of excess over $6,000 |
$37,001 – $80,000 |
$4,650 + 30% of excess over $37,000 |
$80,001 – $180,000 |
$17,550 + 37% of excess over $80,000 |
$180,001+ |
$54,550 + 45% of excess over $180,000 |
Maximum LITO: $1,500, with a 4% withdrawal rate on income over $30,000
Note (*): The above rates exclude the Medicare levy
Note: The flood levy also applies in the 2011/12 year (an extra 0.5% for taxable income between $50,000 and $100,000, and an extra 1% for taxable income over $100,000).
2012/13 tax rates and thresholds*
Taxable Income |
Tax Payable |
|---|---|
0 – $18,200 |
NIL |
$18,201 – $37,000 |
19% of excess over $18,200 |
$37,001 – $80,000 |
$3,572 + 32.5% of excess over $37,000 |
$80,001 – $180,000 |
$17,547 + 37% of excess over $80,000 |
$180,001+ |
$54,547 + 45% of excess over $180,000 |
Maximum LITO: $445, with a 1.5% withdrawal rate on income over $37,000
Note (*): The above rates exclude the Medicare levy
2015/16 tax rates and thresholds*
Taxable Income |
Tax Payable |
|---|---|
0 – $19,400 |
NIL |
$19,401 – $37,000 |
19% of excess over $19,400 |
$37,001 – $80,000 |
$3,344 + 33% of excess over $37,000 |
$80,001 – $180,000 |
$17,534 + 37% of excess over $80,000 |
$180,001+ |
$54,534 + 45% of excess over $180,000 |
Maximum LITO: $300, with a 1% withdrawal rate on income over $37,000
Note (*): The above rates exclude the Medicare levy
- extending the small business instant asset write-off threshold to $6,500 from 1 July 2012;
- providing pensioners and families with extra payments (e.g., extra Family Tax Benefit Part A and B, and a new Single Income Family Supplement);
- reducing fuel tax credits for most businesses (though not businesses in the agriculture, fisheries and forestry industries, nor heavy on-road vehicles like semi-trailers initially) "so that they face an effective carbon price like other heavy polluters"; and
- setting up various renewable energy programs.
