In what is possibly his last act as treasurer before the parliament is officially dissolved, the treasurer, Peter Costello announced changes to individual tax rates over the next three years.

From 1 July 2008:

* the Low Income Tax Offset (LITO) will increase from $750 to $1,200, providing an effective tax free threshold of $14,000 (up from $11,000) to those taxpayers eligible for the full LITO;
* the 30 per cent threshold will increase from $30,001 to $34,001; and
* the 40 per cent threshold will increase to $80,001 and the 45 per cent threshold will increase to $180,001, as announced in the 2007-08 Budget.

From 1 July 2009:

* the LITO will increase to $1,350, providing an effective tax free threshold for low income earners of $15,000;
* the 30 per cent threshold will increase to $35,001;
* the second top marginal rate will be cut from 40 to 38 per cent; and
* the top marginal rate will be cut from 45 to 43 per cent;

From 1 July 2010:

* the LITO will increase to $1,500, providing an effective tax free threshold for low income earners of $16,000;
* the 30 per cent threshold will increase to $37,001;
* the second top marginal rate will be cut from 38 to 37 per cent; and
* the top marginal rate will be cut from 43 to 42 per cent.

He also annouced that the Government will provide an additional $446 million to the Australian Taxation Office over a four year period, starting from 1 July 2008.

For the full details see the treasurer’s press release.

Posted in Tax

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