Repeal of Changes to personal tax rates and independent earner tax credit for 2010-11 and 2011-12 income years

2009 legislation repeals personal tax cuts scheduled for the 2010-11 and 2011-12 income years and cancels the increase in the independent earner tax credit.

Sections 5(2), 6(2), 7(2), 8(2), 9(2), 10(2) and (3), 11(2) and (3), 12(2) and (3), 13(2) and (3), 14(2) and (3), 16(2), 17(2) and 32 of the Taxation (Urgent Measures and Annual Rates) Act 2008; sections 29(2), 30(2) and 31(2) of the Taxation (Business Tax Measures) Act 2009

In response to the difficult fiscal climate, the personal tax cuts scheduled for the 2010-11 and 2011-12 income years have been repealed. Consequential amendments to extra pays, FBT (fringe benefit tax), ESCT (employer superannuation contribution tax), PAYE tax code threshold amounts, and thresholds for non-filing taxpayers have also been repealed. These amendments were contained in the Taxation (Urgent Measures and Annual Rates) Act 2008. Several FBT amendments contained in the Taxation (Business Tax Measures) Act 2009 that were consequential to the personal tax cuts have also been repealed.

Key features

The personal tax rates for 2009-10 and subsequent income years are as follows:

Income Tax rate
$0 - $14,000 12.5%
$14,001 - $48,000 21%
$48,001 - $70,000 33%
$70,001 and over 38%

The increase in the independent earner tax credit that was scheduled for the 2010-11 income year has also been cancelled. The maximum tax credit available for 2009-10 and subsequent income years is $520 per year.

Application date

The amendment applies to the tax cuts and increase in the independent earner tax credit that were scheduled for the 2010-11 and 2011-12 income years.