Small businesses are facing a tough economic environment with many companies in Australia feeling less confident about the future of growth.
In light of this, Prime Minister Tony Abbott announced at a Australian Chamber of Commerce and Industry (ACCI) event last month that his government is committed to cutting the company tax rate for small business.
The proposal was immediately welcomed by Kate Carnell, the CEO of the ACCI, who said business leaders were hwp-contenty to hear from the Prime Minister at the event in Sydney about plans for Australian business in the upcoming budget.
From July 1 this year, small businesses in Australia will get a 1.5 per cent cut in their corporate tax rate, the Prime Minister said in his speech.
However, the ACCI was concerned larger companies were being overlooked when it came to tax relief. According to Ms Carnell, Australia had one of the highest rates of corporate tax in the developed world. She claimed that the current rate of 30 per cent was too high compared to the average across the OECD, which was only 25 per cent.
“With 70 per cent of Australian small businesses unincorporated, many small business operators will not get any benefit from the corporate tax cut. Therefore the government needs to consider other measures, like increasing the threshold for accelerated depreciation to $10,000,” said Ms Carnell.
Having higher corporate tax rates makes doing business in Australia much less attractive, and this can hurt their ability to invest and hire new staff. Ms Carnell believed that by cutting the corporate tax rate businesses around the country would see “stronger investment, more jobs, higher real wages and savings”.
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