The Federal Treasurer Doctor, Jim Chalmers, handed down the Australian Government’s mid year economic and fiscal outlook (MYEFO) on 13 December 2023.
In the outlook the Government has identified further cost savings to reduce the forecast budget deficit for 2023/2024 to $1.1 billion.
Further tax law reforms highlighted in the MYEFO report include:
- Reforms to foreign investment fees for foreign investors including a tripling of fees for investing in established housing and a doubling of vacancy tax. The Government will also reduce foreign investment fees on Build to Rent projects. This aligns with the recently announced policy to help boost Australia’s housing stock. https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/higher-foreign-investment-fees-housing
- Increase of foreign resident withholding tax from 12.5% to 15% and a lowering of the threshold from $750,000 to $0. The reduction in the threshold appears to be ill-targeted and will result in a compliance burden for Australian taxpayers at the lower end of the housing scale.
- Denying tax deductions from 1 July 2025 for ATO interest charges, specifically the general interest charge (GIC) and shortfall interest charge (SIC), incurred in income years starting on or after 1 July 2025. This aligns with a general denial of non-ATO interest deductions on borrowings to pay tax. This measure aims to encourage taxpayers to lodge tax returns and pay tax on time.
Further information can be found in the MYEFO report at: https://budget.gov.au/content/myefo/download/myefo2023%E2%80%9324.pdf
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