Business and retail groups have welcomed the federal budget's plan to increase tax breaks for small business, a move that will encourage innovation, one group claims.
Business and retail groups have welcomed the federal budget's plan to increase tax breaks for small business, a move that will encourage innovation one group claims.
Yesterday, Treasurer Wayne Swan announced that the Small Business and General Business Tax Break will be increased from 30 per cent to 50 per cent for small businesses.
The 50 per cent deduction will be available on new capital worth $1,000 or more, such as vehicles, purchased between December 13, 2008, and December 31 this year.
The eligible items must be installed and ready for use by December 31, 2010.
The tax deductions will come at a cost of approximately $141 million to the government.
Small businesses account for around 95 per cent of the all businesses in the country and about 50 per cent of all private sector employment.
The Chamber of Commerce and Industry WA today welcomed the increased tax relief.
"These initiatives will help small business, which is the lifeblood of the economy, bring forward important investment decisions, and encourage innovation," it said in a statement.
The Australian Retailers Association also echoed CCIWA's sentiment, adding that retailers feel "optimistic" the Rudd government is listening to their concerns and supporting small business.
Also included in the federal budget is $10 million towards a Small Business Support Line, $10 million to support online retail opportunities for small businesses, and $720 million for pay-as-you-go cash flow relief.
Meantime, the Institute of Chartered Accountants in Australia said it was disappointed more incentives were not offered to businesses.
"As we have seen from recent fiscal stimulus measures introduced overseas, research and development expenditure has been highlighted as a key driver in promoting economic recovery," tax counsel for the institute, Yasser El-Ansary, said.
Tax incentives were also not wide-ranging enough, Mr El-Ansary said.