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In its pre-budget government submissions report, CPA Australia has urged the Australian government to extend temporary tax relief to individuals in response to the rising risk of inflationary pressures.
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‘Extend temporary tax relief’, says CPA Australia
24 February 2022
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Speaking on episode four of the professional accounting body’s “With Interest” podcast, Elinor Kasapidis, senior manager of tax policy at CPA Australia, said she wants to see the government extend the low and middle income offset cut.
“The issue really is about who is saving, who has the money and who will be impacted the most by inflation and when you look at those on low and middle incomes, they’re going to bear the biggest brunt,” Ms Kasapidis said.
“They’re going to see it in their shopping basket or they’re going to see it when they’re trying as a sole trader to run their business. So, in that sense it’s about balancing it.”
Ms Kasapidis believes that Australians, particularly those in the lower-income brackets, will require extra breathing room from inflationary pressures over the next year.
“Australians, particularly those on low and middle income, need a bit of breathing space and you don’t want inflation to be eating away at what they have and their disposable income which primarily goes to what they need, rather than on recreational goods and things like that,” Ms Kasapidis said.
This mindset is in line with recommendation 22 of CPA Australia’s pre-budget government submissions, which recommends that the government “[c]onsider further extending the low-and-middle-income tax offset (LMITO) to address inflationary pressures.”
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The recommendation acknowledges that the “extension of the LMITO maintains, in effect, a double-dip tax cut for eligible taxpayers, we think extending the LMITO will ease cost of living pressures.”
CPA Australia recommends that the federal government extend “LMITO to 2022/23 to provide targeted financial relief for these individuals”.
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