The Federal Budget will be released on Tuesday, 29 March 2022. Not only is this an election Budget, so lots of good news, but it is a Budget coming off the back of a pandemic (and the debt required to keep the country running during the pandemic), and a series of extreme emergency events. On top of that, despite record unemployment, confidence has been destabilised by Russia’s invasion of Ukraine, spiking inflation and record petrol prices. It will be interesting to see how the Government responds while keeping in place its tax-to-GDP ratio at or below 23.9%.
While we share an overview of the full budget when it is released next week, here is what we know so far:
A series of measures have been announced for SMEs, much of it focussed on the use of technology and real time data to reduce compliance costs, improve transparency, and match tax payments to financial performance.
• Lowering tax instalments in 2022-23 – GDP uplift rate set to 2% (instead of the statutory 10% rate that would have applied) for PAYG and GST instalments.
• Automating tax reporting and aligning instalment payments to financial performance – aligning tax reporting and instalment payment obligations to financial performance using automated tax reporting systems. New systems to implement this measure are expected to be in place by 31 December 2023 for implementation by 1 January 2024.
• Payroll data sharing between Federal, State and Territory Governments – sharing of single touch payroll data by late 2023.
• Option to report Taxable payments data at the same time as activity statements. New systems are expected to be in place by 31 December 2023, for implementation by 1 January 2024.
• All trusts to have the option to lodge income tax returns electronically. New systems are expected to be in place by 1 July 2024.
• Quarterly lodgement and payment of excise and excise equivalent customs duty for manufacturers, importers and distributors in the alcohol and fuel sectors with an annual turnover of less than $50 million from 1 July 2023.
Cost of living
While not explicitly mentioned beyond a brief statement at a press conference, we expect to see “targeted and proportionate” cost of living relief.
Another 12 months of low and middle income tax offset is expected. Petrol excise changes are possible but it’s hard to see how this would meet the “targeted” criteria.