Level playing field for small business tax concessions

New legislation to standardise the eligibility criteria for small business tax concessions set to come into effect from 1 July next year will provide tax cuts of $150 million, according to the government.

As a result of the new measures, the current separate eligibility tests for GST, the simplified tax system, capital gains tax, fringe benefits tax and pay-as-you-go small business concessions will no longer apply for any business with annual turnover of less than $2 million.

The single definition of small business is expected to accommodate reduced compliance costs for some two million Australian small businesses, or 96 per cent of all Australian businesses.

In a doorstop interview last week, treasurer Peter Costello said the new system will cut through complication, reduce account keeping and, over four years, afford a $277 million benefit for the small businesses of Australia.

The government will be consulting publicly on the draft legislation in early 2007.

For more information, please visit the treasurer's website.