The Federal Government has claimed the Federal Opposition’s policy proposal on dividend imputation will impact around 40 per cent of all self-managed superannuation funds (SMSFs) and as many as 3.5 million superannuation fund accounts.
Reacting to the policy announcement, the minister for Revenue and Financial Services, Kelly O’Dwyer said the move represented a direct attack on retirees, pensioners and low-income earners ad would mean dividends were no longer protected from double taxation.
The minister claimed that despite the Opposition’s suggestions that recipients of imputation credit refunds are "typically wealthier retirees", the fact was that 97 per cent of individuals who received refunds of franking credits had taxable incomes below $87,000.
“What's more, over half of all individuals who receive refunds of franking credits have taxable income below $18,200, including pensioners, part-pensioners and self-funded retirees who have worked hard to support themselves during retirement,” O’Dwyer said. “Labor's policy would completely extinguish a vital income stream for these low income earners.”
“If Labor were serious about preventing the distribution of refundable imputation credits on the basis that entities haven't paid tax, why does their policy still allow hundreds of millions of dollars' worth of franking credits to be refunded to income tax exempt organisations like trade unions?” the minister asked.