Budget 2022-23: Incentives announced for SMBs to go digital

The Federal Government has released its Budget for 2022-23, prioritising the growth of SMBs with a $1 billion allocation towards a new Technology Investment Boost to encourage small businesses to go digital, amongst other initiatives.

Within this Technology Investment Boost, small businesses with an annual turnover of less than $50 million will be able to deduct a bonus 20 per cent of the cost of expenses and depreciating assets that support digital uptake.

This includes portable payment devices, cyber security systems or subscriptions to cloud-based services. The boost will apply to eligible expenditure of up to $100,000 per year, incurred from Budget night until 30 June 2023.

In support of small businesses, the government also launched a plan where SMBs will have access to a new 20 per cent bonus deduction for eligible external training courses for upskilling employees.

The Skills and Training Boost will apply to expenditure incurred from Budget night until 30 June 2024, providing $550 million in tax relief.

“Small and family businesses are at the heart of our economy and local communities. They employ nearly eight million Australians,” treasurer Josh Frydenberg said during the Budget.

“This government has backed small businesses with the lowest tax rates in 50 years and record investment incentives. Tonight, we go further, rewarding small businesses that invest in skills and new technology. No one knows better than a small business owner what skills they need in their employees.

“Starting tonight, for every $100 a small business spends on training their employees, they will get a $120 tax deduction, helping them become more productive and competitive.

“In this Budget, we are also backing small businesses that are embracing the digital revolution. From tonight, every $100 these small businesses spend on digital technologies like cloud computing, eInvoicing, cyber security and web design will see them get a $120 tax deduction.

“Investments of up to $100,000 per year will be supported by this new measure. Lower taxes for small business is part of our plan for a stronger future.”

The government also mentioned that it will deliver more than $21 billion in tax cuts to small businesses from 2015‑16 to 2024‑25, with around $2.6 billion flowing in 2022‑23. This includes the reduced company tax rate for small businesses from 30 per cent in 2013-14 to 25 per cent from 1 July 2021, the lowest level in 50 years.

“Tax relief for small businesses means they have more money to take on an extra worker, offer an extra shift or buy a new piece of equipment,” the Federal Government said.

These new measures introduced aim to reduce compliance costs, streamline reporting requirements and improve cash flow for small and medium business.

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