The Government today introduced legislation to implement a range of changes and improvements to Australia’s taxation system (Tax Laws Amendment (2006 Measures No. 5) Bill 2006). This Bill will amend the taxation laws to:
Reduce regulatory burdens on business
The four fringe benefits tax amendments introduced today will reduce compliance costs for business and relieve employers from some FBT obligations. The amendments will give effect to two of the recommendations of the Report of the Taskforce on Reducing the Regulatory Burdens of Business - Rethinking Regulation.
The FBT amendments will:
- increase the minor benefits exemption threshold to $300, up from $100 (which will relieve some record keeping requirements involved where employers provide minor and infrequent benefits, such as Christmas functions, hampers or occasional use of a car).
- increase the reportable fringe benefits amount threshold from $1,000 to $2,000, resulting in an estimated 70,000 taxpayers no longer having fringe benefits reported on their payment summaries (potentially enhancing entitlement to income tested Government payments such as the family tax benefit).
- increase from $500 to $1,000 the reduction of taxable value that applies to in-house fringe benefits and airline transport fringe benefits.
- extend the definition of ‘remote’ for the purposes of the FBT remote area concessions where the shortest practicable route involves travel by water.All of the amendments were included in the 2006-07 Budget.
Amend the GST concessions
The amendments to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) will ensure that supplies of drugs, medicines and other pharmaceutical items are GST free when supplied as pharmaceutical benefits under the Military Rehabilitation and Compensation Act 2004.
The Bill will also amend the GST Act to extend the GST free car concession to certain people who receive, or are eligible to receive, a Special Rate Disability Pension under Part 6 of Chapter 4 of the Military Rehabilitation and Compensation Act 2004.
Remove the part-year tax-free threshold for taxpayers who have ceased to be full-time students
This measure removes the part year tax free threshold for taxpayers who cease to be engaged in full time education for the first time. The standard tax free threshold of $6,000 will apply to these taxpayers from the 2006-07 income year.
This measure was announced in the 2006-07 Budget and will simplify and reduce compliance costs for taxpayers completing full-time study for the first time.
Currently, resident taxpayers who cease full time education for the first time are not eligible for the full tax free threshold. Rather, they are entitled to a reduced tax free threshold that depends on the number of months they are not studying as well as their income during the full time education period.