Blacktown’s Federal Labor MPs have welcomed news local business could benefit from new tax relief thanks to the Gillard Government’s new Loss Carry-Back initiative.
Federal Member for Greenway, Michelle Rowland said this is great news for local businesses.
“The Loss Carry-Back initiative recognises that not every business is benefitting from the mining boom,” Ms Rowland said.
“Blacktown has a strong wholesale trade sector, professional and technical services and other businesses which employ thousands of local workers.
“This new tax relief will help struggling businesses adjust to the challenges and opportunities of the patchwork economy by improving cash flows,” said Ms Rowland.
Federal Member for Chifley, Ed Husic said that businesses are currently able to carry forward their tax losses to offset future profits and reduce future tax liabilities.
“This new initiative will allow businesses to also ‘carry back’ their losses, to offset past profits and get a refund of tax previously paid on that profit,” Mr Husic said.
“As part of the loss carry-back, from 1 July 2012, companies will be able to carry back up to $1 million worth of losses to get a refund of tax paid in the previous year.”
From 1 July 2013, companies will be able to carry back up to $1 million worth of losses against tax paid up to two years earlier
This new initiative will allow businesses to also ‘carry back’ their losses, to offset past profits and get a refund of tax previously paid on that profit.
In doing so, this reform will mean businesses can use their tax losses now – when they need to – rather than in the future when their businesses are performing better.
Ms Rowland said this important tax reform is in addition to other major tax relief measures for small businesses that start in the 2012-13 income year, including the $6,500 instant asset write off – worth around $1 billion in its first year.
“From 1 July 2012, small businesses will be able to immediately deduct the cost of any new business assets costing less than $6,500, for as many assets as they purchase,” Ms Rowland said.
In addition, businesses will be able to write off assets costing more than $6,500 in a single pool (15 per cent in the first year, 30 per cent in each subsequent year).
*** Joint media release with Michelle Rowland MP, Federal Member for Greenway