Explanatory Memorandum
(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)General outline and financial impact
Reducing personal income tax
Schedule 1 to this bill amends the Income Tax Assessment Act 1936 to increase the low income tax offset and the income threshold at which the low income tax offset begins to be withdrawn.
Schedule 1 also amends the Income Tax Rates Act 1986 to increase the personal income tax thresholds for resident and non-resident taxpayers.
This Schedule also amends the Medicare Levy Act 1986 to increase the income threshold that applies to taxpayers who are eligible for a rebate of tax under section 160AAAA of the Income Tax Assessment Act 1936 (the Senior Australians Tax Offset).
Date of effect : The changes will apply to assessments for the 2003-2004 income year and later income years.
Proposal announced : The Government announced the proposed personal tax cuts in the 2003-2004 Federal Budget on 13 May 2003.
Financial impact : The measure will cost an estimated $2.40 billion in 2003-2004, $2.65 billion in 2004-2005, $2.75 billion in 2005-2006 and $2.90 billion in 2006-2007.
Compliance cost impact : Nil.