2023-2024 Federal Budget - Personal Taxation

Personal Taxation

GST compliance program - four-year extension

The Government will provide $588.8 million to the ATO over 4 years from 1 July 2023 to continue a range of activities that promote GST compliance. This measure is estimated to increase GST receipts by $3.8 billion, and other tax receipts by $3.8 billion, over the 5 years from 2022-23. These activities will ensure businesses meet their tax obligations, including accurately accounting for and remitting GST, and correctly claiming GST refunds. Funding through this extension will also help the ATO develop more sophisticated analytical tools to combat emerging risks to the GST system.

Budget Paper No 2 p 19

Extending the Personal Income Tax Compliance Program

The Government will provide $89.6 million to the ATO and $1.2 million to Treasury to extend the Personal Income Tax Compliance Program for two years from 1 July 2025 and expand its scope from 1 July 2023.

Budget Paper No 2 p 16

Implementation of a global minimum tax and a domestic minimum tax

The Government will implement key aspects of Pillar Two of the OECD/G20 Two-Pillar Solution to address the tax challenges arising from digitalisation of the economy:

• A 15 per cent global minimum tax for large multinational enterprises with the Income Inclusion Rule applying to income years starting on or after 1 January 2024 and the Undertaxed Profits Rule applying to income years starting on or after 1 January 2025.
• A 15 per cent domestic minimum tax applying to income years starting on or after 1 January 2024.

Budget Speech p 14
Budget Paper No 2 p 20
Budget Overview p 63

Personal Income Tax - increasing the Medicare levy low-income thresholds

The Government will increase the Medicare levy low-income thresholds for singles, families, seniors, and pensioners from 1 July 2022. The increase in thresholds provides cost-of-living relief by taking account of recent CPI outcomes so that low-income individuals continue to be exempt from paying the Medicare levy. The threshold for singles will be increased from $23,365 to $24,276. The family threshold will be increased from $39,402 to $40,939. For single seniors and pensioners, the threshold will be increased from $36,925 to $38,365. The family threshold for seniors and pensioners will be increased from $51,401 to $53,406. For each dependent child or student, the family income thresholds will increase by a further $3,760 instead of the previous amount of $3,619.

Budget Speech p 7
Budget Paper No 2 p 22
Budget Overview p 14
Media Release

Personal Income Tax - exempting lump sum payments in arrears from the Medicare levy

The Government will exempt eligible lump sum payments in arrears from the Medicare levy from 1 July 2024. This measure will ensure low-income taxpayers do not pay higher amounts of the Medicare levy as a result of receiving an eligible lump sum payment, for example as compensation for underpaid wages.

Budget Speech p 7
Budget Paper No 2 p 22
Budget Overview p 14
Media Release

Tax Integrity - expanding the general anti-avoidance rule in the income tax law

The Government will improve the integrity of the tax system by expanding the scope of the general anti-avoidance rule for income tax (Part IVA of the Income Tax Assessment Act 1936) so that it can apply to:

• schemes that reduce the tax paid in Australia by accessing a lower withholding tax rate on income paid to foreign residents
• schemes that achieve an Australian income tax benefit, even where the dominant purpose was to reduce foreign income tax.

Budget Speech p 14
Budget Paper No 2 p 29

Amending measures of the former Government

The Government will amend measures announced by the former Government to provide greater certainty to taxpayers:

• Amend the start date of the 2016-17 MYEFO measure: Tax integrity - franked distributions funded by capital raisings from 19 December 2016 to 15 September 2022.
• Amend the start date for some components of the 2022-23 March Budget measure: Streamlining excise administration for fuel and alcohol package from 1 July 2023 to 1 July 2024. The changed start date applies to the measures that:
  • remove overlapping Australian Border Force and ATO systems (Uniform Business Experience)
  • streamline license application and renewal requirements
  • remove regulatory barriers for excise and excise equivalent customs goods (including lubricants, bunker fuels for commercial shipping industries, and vapour recovery units)
  • further, the ATO will publish on its website a public register of entities that hold excise licences to store or manufacture excise and excise equivalent customs goods, from 1 July 2024.
• Amend the non-arm's length income (NALI) provisions which apply to expenditure incurred by superannuation funds by:
  • limiting income of self-managed superannuation funds and small Australian Prudential Regulation Authority (APRA) regulated funds that are taxable as NALI to twice the level of a general expense. Additionally, fund income taxable as NALI will exclude contributions
  • exempting large APRA regulated funds from the NALI provisions for both general and specific expenses of the fund
  • exempting expenditure that occurred prior to the 2018-19 income year.

Budget Paper No 2 p 13

Strengthening Australia's Anti-Money Laundering Framework

The Government will provide $14.3 million over 4 years from 2023-24 to support policy and legislative reforms to harden Australia against illicit financing and evaluation of Australia's anti-money laundering framework. Funding includes:

• $8.6 million over 3 years from 2023-24 to the Australian Transaction Reports and Analysis Centre (AUSTRAC) to develop and consult stakeholders on legislative reforms to modernise Australia's anti-money laundering and counter-terrorism financing regime and support preparation for and participation in, the evaluation of Australia's regime against global standards by the Financial Action Task Force
• $5.6 million over 4 years from 2023-24 in additional departmental resourcing for the Attorney-General's Department.

Budget Paper No 2 p 63

Tax Integrity - improving engagement with taxpayers to ensure timely payment of tax and superannuation liabilities

The Government will provide funding over 4 years from 1 July 2023 to enable the ATO to engage more effectively with businesses to address the growth of tax and superannuation liabilities.

Budget Speech p 14
Budget Paper No 2 p 29

Extending and merging the Serious Financial Crime Taskforce and Serious Organised Crime program

The Government will extend funding for the Serious Financial Crime Taskforce (SFCT) and Serious Organised Crime program (SOC) over 4 years to 30 June 2027 and merge the programs, with a merged SFCT to commence from 1 July 2023. Funding for both programs currently terminates on 30 June 2023.

Budget Paper No 2 p 17

Indirect Tax Concession Scheme - diplomatic and consular concessions

The Government has extended refunds of indirect tax (including GST, fuel and alcohol taxes) under the Indirect Tax Concession Scheme (ITCS). New access to refunds has been provided for construction and renovation arrangements for North Macedonia and Latvia relating to their current and future diplomatic missions and consular posts. Saudi Arabia will also have ITCS access upgraded for its Embassy and current and future Consulate-General.

Budget Paper No 2 p 21