Joe Hockey to ditch or enact tax changes, pending announcement

Federal Treasurer Joe Hockey is rumoured to be announcing plans as early as next week to either ditch or implement a raft of tax changes which have been in limbo for up to 12 years.

There are 95 potential tax changes which have been announced by past governments and not enacted, according to global accounting firm EY.

The new Parliament meets for the first time next week on November 12 and it is expected Hockey will announce the plans quickly.

Known changes announced by the Coalition before the election include the repeal of the carbon tax and the Mining Resources Rent Tax.

The Liberal Party also pledged to not increase the fringe benefits tax on cars.

Other unlegislated changes already announced by the Coalition include the scrapping of the recently introduced loss carry-back scheme and the removal of the instant asset write-off.

The instant asset write-off allows small businesses to write off assets worth less than $6500 against their profits, reducing their tax bill immediately.

SmartCompany contacted the Treasurer’s office, but no comment was available.

The Australian Financial Review reported this morning one of the changes to be made by Hockey will see a major tax change dumped.

One of the biggest changes on the cards is the potential increase of the tobacco excise by 12.5% annually for four years, equating to a packet of cigarettes being approximately $5.25 more expensive in 2017, bringing in an extra $5.3 billion.

EY tax partner Alf Capito told SmartCompany previously the tax changes could impact the small business community in a significant way.

“The economy is still jigging along, but when you have close to 100 measures unlegislated, each one impacts a small proportion of the tax paying community, potentially in a significant way,” he said.

“If you’re looking to buy an asset, but don’t know if you’ll get the instant tax write off or not, you wait to buy it until it becomes clear. So it’s hampering investment and potentially creating a position where jobs aren’t being created.”

Capito said in October the Coalition was “determined to deal with these issues”.

“But the difficulty will be finding the resources to get these issues resolved when it’s taking a tough line on public service cuts,” he said.

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