Farmers will be given a helping hand with a cap on the ‘effective life’ of tractors and harvesters for income tax purposes, Minister for Revenue and Assistant Treasurer, Peter Dutton, announced today.
“The strong economic management of the Howard Government over the last decade has put us in the perfect position to help Australian farmers.”
“With the drought affecting farmers and their families across Australia, the last thing they need is to be faced with a change in the tax treatment of their valuable farm equipment,” Mr Dutton said.
The current ‘effective life’ used to calculate income tax write-offs for harvesters and tractors is 6⅔ years. As part of the on-going process to update its ‘effective life’ schedules, the Australian Tax Office would be required to release a discussion paper suggesting the levels be increased to 12 years for new tractors and 10 to 12 years for larger, new harvesters.
This would effectively reduce the deductions farmers receive for the depreciation of their equipment, spreading them over almost twice the number of years.
“The Government believes farmers should have certainty with regard to the depreciation life of tractors and harvesters. Farmers shouldn’t have to bear any additional tax changes as they struggle to run their farms.”
“That’s why the Government will act to implement a statutory cap to preserve the current 6⅔ year period over which farmers can depreciate tractors and harvesters.”
“This will mean no change to the income tax treatment on harvesters and tractors,” Mr Dutton said.
“The Howard Government is committed to helping Australian farmers struggling under this drought. Protecting farmers with this tax decision is another way of giving them the support they need,” Mr Dutton said.