The Treasury Laws Amendment (Personal Income Tax Plan) Bill 2018 brings in wide-ranging changes to the taxation system over several years:
- From the 2018-19 financial year to the 2021-22 financial year, low and middle income earners will be eligible for a tax offset of up to $530.
- In the 2018-19 financial year, the threshold for the 32.5 per cent tax rate will increase from $87 000 to $90 000.
- From 1 July 2022, the threshold for the 32.5 per cent tax rate will again increase from $90 000 to $120 000. The threshold for the 19 per cent tax rate will increase from $37 000 to $41 000. The low income tax offset will also increase.
- From 1 July 2024, the top threshold of the 32.5 per cent tax bracket will again increase from $120 000 to $200 000. The 37 per cent tax bracket will be abolished, cutting the number of tax brackets from 5 to 4.
Introducing the bill in the House of Representatives, the Treasurer, the Hon Scott Morrison MP, said, ‘This bill implements the Turnbull government's Personal Income Tax Plan to make personal income taxes lower, simpler and fairer. It's about providing tax relief for working Australians, particularly those on middle to low incomes.’