Mid-size businesses stand to lose research and development (R&D) incentives and miss out on promised company tax rate reductions as a new bill was introduced to Parliament, according to Grant Thornton.
In a statement, the firm said that lodged deep within the federal Budget papers was a note that the level of the tax offset support was to be dropped by 1.5 per cent to 43.5 per cent for the refundable tax offset and 38.5 per cent for the non-refundable.
This bill has now been introduced into the House of Representatives and, if passed through Parliament, will apply for the years of income starting after 1 July 2014.
Sukvinder Heyer, national leader for R&D tax at Grant Thornton Australia, said the bill could hurt innovation and discourage investment.
“The reduction in the rate was to go hand in hand with the reduction in income tax rate. The reduction is therefore proceeding but the reduction in income tax rates is not, except for small business with a turnover of less than $2 million,” she said.
“Innovation does not happen in isolation. It requires companies – small, medium and large – to be playing their part. Stable support is needed at all levels. Continued changing of the rules leads to uncertainty – the antithesis for encouraging investment.
“Mid-size businesses need a stable environment to invest in innovation and the chipping away at the main mechanism for supporting innovation, without public consultation, is disappointing,” Ms Heyer said.
Thursday, 28 May 2015