Tax Laws Amendment (Personal Income Tax Reduction) Bill 2008

The Treasurer has introduced the Tax Laws Amendment (Personal Income Tax Reduction) Bill 2008 to implement the tax changes promised in the election.

The changes will take effect in three stages: from 1 July 2008, 1 July 2009 and 1 July 2010.

From 1 July 2008:

the lower limit of the 30 per cent threshold will rise from $30,001 to $34,001; and

the low income tax offset will increase from $750 to $1,200. The low income tax offset will continue to phase out from $30,000 at a rate of 4 cents in the dollar for every dollar of income over $30,000.

From 1 July 2009:

the lower limit of the 30 per cent threshold will rise from $34,001 to $35,001;

the low income tax offset will increase from $1,200 to $1,350; and

the 40 per cent tax rate will be reduced to 38 per cent.

From 1 July 2010:

the lower limit of the 30 per cent threshold will rise from $35,001 to $37,001;

the low income tax offset will increase from $1,350 to $1,500; and

the 38 per cent tax rate will be reduced to 37 per cent.