Govt showcases savings incentives
The Federal Government has released a discussion paper detailing its policy proposal to provide a 50 per cent tax discount for interest income earned by low and middle income earners.
The Assistant Treasurer and Minister for Financial Services, Bill Shorten, claimed the introduction of the discount would benefit more than five million taxpayers, with particular benefits for low and middle income savers who were more likely to put their savings into banks, credit unions or building societies rather than investments.
He said a tax discount for interest income represented an important step towards a more consistent taxation regime for savings, with individuals in 2012-13 being entitled to a tax discount equal to 50 per cent on up to $500 of interest income received, and from 1 July 2013 being entitled to the 50 per cent discount on interest income of up to $1,000.
Shorten said the tax discount for interest income would improve incentives for individuals to put their money into interest-bearing savings accounts, reducing some of the discrepancies in tax treatment that currently exist between different investment and savings options.
AUTHOR
Mike Taylor
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