Prepare for carbon tax: accountant
BUSINESSES in Central Queensland need to prepare now for the effects of the carbon tax, according to a Rockhampton accountant.
Chartered accountant with long-time local firm Kennas, Peter Shonhan said effects would be felt at East St retail shops, among many other places, as a result of the Federal Government's plan to put a price on pollution.
Mr Shonhan said Treasury modelling suggested an increase in national inflation of 0.7% as a result of the carbon tax, but it could be higher due to indirect effects on the price of services from electricity supply to transport costs.
He said another aspect that people must begin considering, was the effects on income tax for ordinary Australians.
As part of the carbon tax plan, the Government will complete wide-ranging tax reforms, including changing tax rates for several brackets.
Mr Shonhan said the tax-free threshold would also be raised to $20,542, to offset the increased tax rates.
“Overall income tax rates will go down for low to middle income earners, with high-income earners having little to no effect.”
Income tax rates will rise next year for people earning between $18,201 and $37,000 from 15% to 19%, while those between $37,001 to $80,000 will pay 32.5%, up from 30%.
Mr Shonhan said one benefit was the instant write-off for depreciating assets rising to $6500 for small businesses with a turnover less than $2 million.
But he warned business owners to keep an eye on increases in prices for goods and services, and to start planning, as all businesses will be forced to pass on cost increases to the consumer.
Mr Shonhan said the second half of this financial year was the last chance to start talking to accountants, but it was better to be prepared now for the changes.
“Businesses need to be aware that the Treasury modelling, while it is probably accurate, a lot of detail has still not come out, and we know people are uncertain about the effects of the carbon tax. Small businesses need to know if inflation goes up higher than expected, that shortfall is going to have to be passed on.”