Scott Morrison will hand bigger tax cuts than expected to small businesses

Scott Morrison. Photo: Scott Morrison MP/ Facebook.

Small businesses are poised to be among the biggest winners in the federal budget.

There are reports treasurer Scott Morrison will significantly lift the threshold for companies to qualify for special small business company tax rate of 28.5% (compared to 30% for larger companies).

And he may even lower the rate itself.

At the same time, Morrison is also expected to hold off cutting the company tax rates for corporates, although he will announce a target of reducing the rate by several points from the current 30% over successive budgets.

This would blunt the opposition’s attacks about the Turnbull government being too friendly with big business, a core theme for Labor in recent months. The government was pushed into announcing more funding for the corporate regulator ASIC last month after Labor leader Bill Shorten called for a royal commission to investigate Australia’s banks following a string of scandals involving traders and banking sales tactics.

Business Insider reported in March that Morrison was considering a gradual reduction to Australia’s corporate tax rate, which has been the approach of David Cameron’s government in Britain.

The Australian reports Morrison will cut the tax rate for small business to 27.5% from the current 28.5%, and lift the turnover threshold at which businesses can claim the rate from $2 million to $5 million. The AFR, meanwhile, says the threshold will be lifted to $10 million.

We’ve asked the Treasurer’s office for clarification and will update if we hear back.

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