From the 2016-17 income year, companies with annual turnover less than $10 million will have a company tax rate of 27.5%.
This will decrease the tax rate for around 870,000 companies who employ around 3.4 million workers.
Since many small businesses are not companies, from July 1, 2016, the government will also increase and extend access to the unincorporated small business tax discount to unincorporated businesses with turnover of less than $5 million.
The rate will increase to 8%, capped at $1,000. After the initial increase, the discount will be increased in phases to a final discount rate of 16% from July 1, 2026.
Each year the government will also continue to step up the turnover threshold for access to the lower company tax rate of 27.5% for more businesses, from $10 million to $25 million in 2017-18, to $50 million in 2018-19, and to $100 million in 2019-20.
The Government will reduce the company tax rate to 25% over 10 years.
The rate will firstly be reduced to 27.5%, and then it will be reduced progressively to 25% in 2026-27.