Tax Cut

|by Jun Yang|Taxation and Compliance

The government delivered tax cut package of $158 billion plan on 4 July 2019 over the following three stages:

- FY2018 – 2019 Tax cut applies to people earning less than $126,000 unevenly

Below $37,000, tax cut $255

Between $37,001 - $48,000, tax cut $255 plus 7.5% of what is over $37,000

Between $48,001 - $90,000, tax cut 1,080 flat

Between $90,001 - $126,000, tax cut $1,080 less 3% of what is over $90,000

Over $126,000 – nil

You will get the tax cut when you lodge your tax return for 2019. Tax cut comes as a form of tax offset, so if you don’t have any tax to pay, say your income is $20,000, you won’t get $255 tax refund in your bank account. The cut is meant to reduce the tax amount you are paying.

A lot people do not realise back in 2018 – 2019 budget, the government already announced tax cut for low- and middle-income earner up to $530. Last week’s bill is more generous than the previous one.

The stage one tax cut will last for 4 years from 2019 till 2022.

- On 1 July 2022, the 2nd stage of tax cut will take into effect which has several measures.

37% tax bracket will be lifted from current $90,000 to $120,000

19% tax bracket will be lifted from current 37,000 to $41,000

- Stage 3 tax cut starts from 1 July 2024 which will see people earning between $45,000 - $200,000 to have flat rate of 30%.

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