THERE have been mixed reactions in the small business sector to last week’s ‘no frills’ federal budget, despite a range of tax concessions outlined by the Henry tax review.
WA Small Enterprise Network manager Andrew Canion said the measures handed down would relieve the tax burden on the state’s SMEs, which would directly benefit from changes to depreciation, asset write-offs and company tax deductions.
However, Small Business Development Corporation acting managing director, Jacky Finlayson, said she was disappointed many changes would not be introduced until 2012-13.
“Around two-thirds of all small businesses will miss out on these tax cuts and those that are eligible will need to wait a long time before they see their tax rates drop to 28 per cent,” she said.
The Henry review recommended, among other things, a range of SME concessions, such as: updating rules around the taxation of trusts, to reduce complexity; the introduction of a standard deduction option of $500 in 2012, and $1,000 from 2013; and a 50 per cent discount to the amount of interest income subject to tax.
WHK Horwath taxation principal Helen Wicker said the federal government missed an opportunity to “retro charge” the ability of SMEs to contribute further to the economy’s recovery.
She said while some tax-friendly initiatives were included in the budget, a whole range of other concessions could have given SMEs “a real boost”.
“For instance, it would have been preferable if the government could have increased the turnover threshold from $2 million to $5 million in its definition of small business entities,” Ms Wicker said.