Australian Taxation Office Extends Upto Six Months for Asset Write-Off Amidst COVID-19 Crisis
With millions of businesses hushing and pushing themselves hard to clear the write-offs under taxation documentation, ATO has decided to extend the deadlines for the asset write-offs. As per the Treasurer, ATO, Josh Frydenberg has agreed to extend the asset write-off program for another six months. There are millions of Australian Businesses that are given with the deadline until 2021 to invest under the recent federal government’s tax write-off scheme. With the growing COVID-19 pandemic, this is one of the initial measures that has been introduced since March.
The half-year extension is predicted to cost $300 million over the forward estimate of the Australian businesses. This would allow the Australian businesses with an annual evaluation of $500 million over write-offs over $150,000 in all the equipment and other necessary items. The federal government first launched the first of its kind, $8M coronavirus stimulus package. In this programme, the businesses were limited to the $30,000 write-off threshold. However, some of the businesses got closed temporarily due to the aftereffects of social distancing. Some of the restrictions have been relaxed across the nation, and the new steps are intended for the delayed investment plans.
In a joint statement, Treasurer Josh Frydenberg and Minister for Employment Michaelia Cash also stated that the extension is intended for the businesses to provide extra time to install assets. This would help the businesses to generate revenue and improve cash flow that will bring lesser tax deductions. The new and secondhand assets, for example, equipment, vehicles, and computer hardware, are the investments that are listed as eligible amongst the extension of Asset Write off tax time. This applies for every Asset under $150,000 and can be accessed numerously. The cost of scheme expansion is $100M in 2020-21, which is being followed by $600M up to next year with $400M in 2023-24.
As per the Australian Taxation’s initial scheme was expected to cost $700 million over the forward estimates. In NSW, almost 1.12M are eligible under the scheme, 975,000 in Victoria, 690,000 in Queensland, 360,000 in Western Australia, 250,000 in South Australia, 45,000 in ACT, 65,000 in Tasmania and 20,000 in the Northern Territory. The federal government is struggling with the investment slump as a part of the COVID-19 consequences. The Bureau of Statistics capital expenditure figures predicts the non-mining investments getting lowered upto 23% in March and 9% upto March.
An Extra Six-Months
ones who are hardly hit by the supply chain delays in COVID-19. This will also help the businesses to bring forward the tax deductions. Recently, the heavy rains have reduced the effects of drought in most of the areas. This has impacted the farm businesses to get into regular production. In this case, the government hopes for the positive effect of spending on agricultural equipment.
As a bottom line, this step is intended for the revenue generation for the businesses along with positive cash flow for them. This will also help them to bring forward the tax reductions, which will play a decisive role in stabilizing their business.