Australia Unveils Carbon Tax Plan
July 11, 2011 Taxation in Australia
The Australian government has revealed the pricing policy for its upcoming carbon tax system, and changes to be made to personal income tax rates.
At a press conference held on July 10th in Canberra the Prime Minister of Australia Julia Gillard revealed the final pricing details for country’s long-debated carbon tax system. The Prime Minister also described the tax system overhauls aimed at ensuring that the country’s economy does not suffer under the new tax.
From July 1st 2012 the national carbon tax will be set at AUD 23 per ton of pollution released into the atmosphere. The price is scheduled to rise by 2.5 percent each year for the following three years. On July 1st 2015 the tax will be replaced with an emissions trading scheme, in which the effective price of emissions would be determined by the market.
Approximately 500 businesses will initially be required to pay under the new carbon tax system. According to the Prime Minister, approximately half of the revenues raised will be reserved to fund a series of tax cuts for Australians, while the other half will be used to organize initiatives aimed at lessening the financial impact that the new tax will have on the Australian economy.
The Prime Minister also announced that on July 1st 2012, the country’s taxpayers will see a measure of financial relief, as the tax free payment threshold for personal taxes is raised from the current AUD 6 001 to AUD 18 201. The level is scheduled to be raised to a further AUD 19 401 in 2015. After the initial increase, the lowest marginal tax rate will be raised to 19 percent, from the current 15 percent. Despite the rate rise, the Prime Minister said that Australians will not be worse off after the changes, and the new tax balance will improve the financial situation of most employed Australians.
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