Former Federal Treasurer, Josh Frydenberg handed down the Coalition Government’s 2022/23 Budget in March. The budget included a number of announcements, of which some were legislated prior to the federal election. The major tax-related measures announced in the Budget and now legislated include:
Increase to Low and Middle Income Tax Offset (‘LMITO’)
The Government has announced a once-off $420 ‘cost of living tax offset’ for the 2022 income year, which will be provided in the form of an increase to the existing LMITO. This will increase the maximum LMITO benefit to $1,500 for individuals and $3,000 for couples, and will be paid from 1 July 2022 when Australians submit their tax returns for the 2022 income year.
Other than those who do not require the full offset to reduce their tax liability to zero, all LMITO recipients will benefit from the full $420 increase. All other features of the LMITO remain unchanged.
Tax Deductibility of COVID-19 Test Expenses
The costs of taking a COVID-19 test to attend a place of work are tax deductible for individuals from 1 July 2021. In making these costs tax deductible, the Government will also ensure FBT will not be incurred by businesses where COVID-19 tests are provided to employees for this purpose.
No Changes to the Personal Tax Rates for 2022-23
The Stage 3 personal income tax cuts remain unchanged and will commence in 2024-25 as already legislated.
Temporary Reduction in Pension Drawdown Rates Extended
The Government has announced an extension of the temporary reduction in superannuation minimum drawdown rates for the 2022/23 financial year.
As part of the response to the coronavirus pandemic, the Government reduced the superannuation minimum drawdown rates by 50% since the 2019/20 financial year.
Temporary Reduction in Fuel Excise
The Government will help reduce the burden of higher fuel prices by halving the excise and excise-equivalent customs duty rate that applies to petrol and diesel, and all other fuel and petroleum-based products except aviation fuels, for six months. This measure will commence from 12.01am on 30 March 2022 and will remain in place for six months.
Apprentice Wage Subsidy Extension
The Boosting Apprenticeship Commencement (BAC) and Completing Apprenticeship Commencements (CAC) wage subsidies has been extended by three months to 30 June 2022.