Low and Middle Income Tax Offset
A measure that will no doubt be beneficial for individual taxpayers is the increase in the Low and Middle Income Tax Offset (‘LMITO’) for the 2022 income year by $420. The LMITO is a tax offset which reduces an individual taxpayer’s tax liability.
This means that the maximum amount of the LMITO for the 2022 income year will now be $1,500 (up from $1,080 for the 2021 income year).
However, the LMITO will not be extended to the 2023 income year.
Reduction in Fuel Excise
Fuel excise on petrol and diesel will be reduced by 50% (a reduction of 22.1 cents per litre) from 30 March 2022 to 28 September 2022.
This temporary reduction in the fuel excise is to soften the impact of increased petrol and diesel prices that have been triggered by Russia’s invasion of Ukraine.
Tax deductions for work-related COVID-19 tests
Last month’s edition of Practice Update discussed a proposal for COVID-19 tests, to be both:
- tax-deductible; and
- exempt from FBT;
broadly where they are purchased for work-related purposes.
This proposed legislative change is now law with effect from 1 July 2021.