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Farmers get a better deal on business tax.



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Media Release

The Hon Warren Truss, MP

Minister for Agriculture, Fisheries and Forestry

 

AFFA99/42WT

22 September 1999

FARMERS GET A BETTER DEAL ON BUSINESS TAX

 

Farmers will benefit significantly from the Government’s business tax reforms which will deliver a simpler and fairer system, the Federal Minister for Agriculture, Fisheries and Forestry. Warren Truss, said today.

 

Mr Truss said the Federal Coalition has faithfully kept its promise to farmers to retain all primary producer specific tax concessions.

 

The Government will retain primary producer tax provisions such as livestock valuation, landcare and water deductions, and income tax averaging. Almost all farmers will qualify for the small business simplified tax system.

 

The Minister said many farmers would welcome simplified depreciation arrangements for all depreciating assets, not just plant and equipment.

 

The simplified tax system for small businesses will allow, from 1 July 2001, eligible farmers to pool their assets with an effective life less than 25 years and claim 30 per cent declining value depreciation on the asset pool. This method should retain, in general, accelerated depreciation benefits currently being enjoyed, and at the same time reduce compliance costs for farmers at tax time.

 

Further, from 1 July 2001 assets costing less than $1000 will be allowed to be written off immediately.

 

Mr Truss said the cuts to capital gains tax will provide a real break for farmers and individual investors in regional Australia and enable rural businesses to expand as well as move from less productive to more productive assets. Capital gains tax will be simplified and eased. Small farming businesses Would pay tax on a maximum of 25 per cent of the capital gains. For individuals, 50 per cent of capital gains will be taxed.

 

I addition, small farming businesses purchasing replacement active farm assets will be allowed to defer the remaining tax liability. A retiring farmer aged 55 or over will have a full exemption from CGT on the sale of farm assets, held for more than 15 years, to fund retirement. Therefore, many farmers will pay no CGT on the sale of their farms and active assets.

 

The National Farmers Federation has estimated that nearly 70 per cent of farmers have owned their farms for more than 15 years. These OGI changes extend the Coalition’s earner rollover relief reforms.

 

Mr Truss said defending native title claims on farms would be treated as a tax deduction.

 

“The Coalition Government is continuing its agenda of reform of the Australian Tax system to provide a more competitive and fairer environment for all Australians and, in particular, our primary producers," Mr Truss said.

 

 

al  1999-09-27  09:28