Business tax break chopped

A TAX break for struggling small businesses is being abolished, and business are not happy about it.

The Entrepreneurs Tax Offset (ETO) was introduced to support small business, providing a 25% tax offset on annual income tax liability on turnover up to $50,000 phasing out at $75,000 turnover.

Now the ETO is set to be scrapped by the Federal Government.

"Self-employed semi-retirees, home-based businesses, start-ups and small retailers are just some of the micro businesses that will be hit hard," Member for Wide Bay Warren Truss said.

"In an economy where confidence is low and business is doing it tough, business people need greater support and encouragement from government. Instead, Gillard Labor is taking away an important incentive, which will make it harder for small businesspeople to make ends meet," Mr Truss said.

Both Maryborough and Hervey Bay Chambers of Commerce were also unimpressed.

Lance Stone, president of the Maryborough Chamber of Commerce, said the loss of the tax break was coming at the worst possible time for small businesses.

"This is the time government needs to get behind small business," he said.

"It will be especially hard on new businesses just starting up, which is when you need the most support."

President of the Hervey Bay Chamber of Commerce, Bernard Whebell, said the loss of the ETO would hurt the "engine room of the Fraser Coast economy".

While the loss of the ETO would result in small businesses losing about $500 a year, Mr Truss said that when a businesses' profit margins were only about $50,000, they needed all the help they could get.

"We need policies and economic settings which strengthen small business, not tax hikes that threaten their existence," Mr Truss said.



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