Last week MYOB released its latest SME Snapshot which revealed that 63 per cent of small business owners are positive about the decision to reduce company tax rates.
Interestingly, 44 per cent of businesses indicated that they plan to invest whatever savings come from reduced company tax rates back into their business.
Speaking to Accountants Daily, MYOB’s chief strategy officer, John Moss said that while the changes are small, SMEs are positive about what it can mean for them.
“It is a small change in a sense that small businesses have been extended from $2 million to $10 million and the tax rate will be dropping by 1 per cent so in absolute terms the percentage reduction in tax is quite small,” Mr Moss said.
“If you think about a business between $2 million and $10 million taxable income, the 1 per cent won’t make enough of a saving to start recruiting new staff or anything like that at this point in time, but over time it will.”
MYOB’s SME snapshot also revealed that 43 per cent of SMEs are planning to use the newly legislated $20,000 asset tax write-off this financial year.
“We saw when the instant asset tax write-off was increased in 2015 that was very popular and it remains that way now they've decided to extend it,” Mr Moss said.
“A lot of SMEs are planning to use that and in fact many have already spent on items that they'll then depreciate or write off in this tax year, so that’s good.”
In contrast not all research indicates SME satisfaction with KPMG Enterprise finding that 40 per cent of SMEs believe the government’s cuts to the corporate tax rate will make no difference, and H&R Block's finding that up to 67 per cent of small business owners are not taking advantage of the $20,000 instant asset write-off.