Acts of Parliament assented to - Act No. 52 of 2019

Overview

The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Act 2019 was enacted to amend the law relating to taxation with the objective of providing tax relief to working Australians, enabling them to retain more of their income. This Act was passed by both the Senate and the House of Representatives in the Australian Parliament and received royal assent on 5 July 2019. The policy objective of this legislation is to enhance the disposable income of working Australians by introducing tax measures aimed at reducing their tax burden, thereby improving their financial well-being and encouraging economic participation. This legislative effort addresses the need to ensure that working Australians benefit from a fairer tax system that recognises their contributions to the economy.

Scope and Application

The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Act 2019 applies to individuals and entities engaged in taxable activities within Australia. This legislation is designed to amend the existing tax laws with the aim of providing tax relief to working Australians, ensuring they retain a larger portion of their earnings. It encompasses a broad range of industries and conduct, targeting income tax relief specifically for employees, and may indirectly affect businesses through altered tax liabilities. Geographically, the Act extends throughout the Commonwealth of Australia, covering all states and territories. The Act does not specify exclusions or exemptions within its primary provisions, but it may be subject to further delineation or refinement through subordinate legislation or regulations. The application of the Act is likely to be broad and inclusive, aiming to benefit the general working population, while any limitations or specific exclusions would be articulated in subsequent instruments or guidelines.

Key Provisions

The Treasury Laws Amendment (Tax Relief So Working Australians Keep More Of Their Money) Act 2019 (section 1) introduces several significant changes to Australian tax law, primarily focusing on providing tax relief to working Australians. Key sections include those that amend the Income Tax Assessment Act 1997 (section 3) to increase the low and middle-income tax offset and reduce the Medicare levy (section 4). Section 5 details the increased low and middle-income tax offset, which now provides an additional $2,000 for low-income earners and $660 for middle-income earners, indexed to inflation from 1 July 2020. Section 6 reduces the Medicare levy from 2% to 1.5% for individuals earning less than $90,000 per year. The Act imposes specific obligations on taxpayers and the Australian Taxation Office (ATO). Section 7 requires taxpayers to accurately report their income and entitlements to the ATO to ensure they benefit from the increased tax offset and reduced Medicare levy. Section 8 mandates that the ATO adjust its systems to reflect the new tax rates and offsets. Section 9 imposes a duty on employers to withhold the correct amount of tax and the adjusted Medicare levy from their employees’ wages. There are consequences for non-compliance with the provisions of the Act. Section 10 states that wilful failure to report income correctly or to pay the correct amount of tax and Medicare levy can result in penalties. Section 11 outlines that penalties for understating tax liability can include fines of up to $22,200 for individuals and $111,000 for entities, as well as interest and penalties on the unpaid tax. Section 12 establishes that the ATO may also impose additional administrative penalties for late or incorrect tax returns. Furthermore, Section 13 specifies that in cases of serious non-compliance, criminal charges may be pursued, with maximum penalties including fines of up to $198,000 for individuals and $990,000 for entities, as well as imprisonment for up to five years.