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The FederalnGovernment has introduced a Bill which proposes to implement its 2016 Budgetnproposal to increase the third personal income tax threshold that applies tonpersonal income taxpayers. The rate of tax payable on individuals’ taxablenincomes from $80,001 to $87,000 would fall from 37{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} to 32.5{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70}.
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Thennon-resident tax schedule would also be amended as a result of the Bill, increasingnthe upper limit of the first income tax bracket to $87,000. A tax rate of 37{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} wouldnapply to taxable income between $87,001 and $180,000, and the top marginal taxnrate of 45{256a07afe6cf75b7e23500f37551d0affdf8bab65b8226b57f0b6b9aa6c8fc70} would remain for taxable income over $180,000.
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Shortlynfollowing the Bill’s introduction in Parliament, the ATO issued new PAYGnwithholding tax schedules that reflect the lowered personal tax rate in thenBill. Effective from 1 October 2016, employers will be required to lower thenamount of tax withheld for affected taxpayers to factor in the new lower taxnrate. Any tax overpaid beforehand will be refunded by the ATO on assessmentnafter the end of the 2016–2017 financial year.
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Important: Clients should not act solely on the basis of the material contained in Update. Items herein are general comments only and do not constitute or convey advice per se. Also, changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. This update is issued as a helpful guide to clients and for their private information.