Australia
Business group warns against proposed trust tax hike
The Australian Chamber of Commerce and Industry has warned that a proposed 30 per cent tax on discretionary trusts will damage small businesses.
By The Victoria Brief News Desk
1 min read
The Australian Chamber of Commerce and Industry has issued a strong warning over proposed changes to discretionary trusts, arguing the policy will trigger massive tax increases for small businesses.
The peak industry group has strongly criticised the federal government's proposal, which would introduce a minimum 30 per cent tax rate on discretionary trusts. According to wire reports, the chamber argues that the policy will disproportionately impact independent operators who rely on trust structures to manage their affairs.
Discretionary trusts are widely used by Australian small businesses and family enterprises for asset protection and income distribution. Under the current system, trust income can be distributed to beneficiaries who may be taxed at their individual marginal rates, which are sometimes lower than the proposed 30 per cent flat minimum.
The chamber has actively opposed the proposal, claiming it represents a direct threat to the viability of many smaller operators. Business advocates argue that increasing the tax burden on these structures will stifle investment and reduce the capital available for business growth.
Details remain limited on how the federal government plans to transition to the new tax model, or what specific exemptions might apply to small-scale family businesses. The government has yet to release a full response to the chamber's criticisms, and the exact timeline for implementing the proposed 30 per cent minimum tax rate has not been confirmed.
For many operators, the lack of clarity surrounding the transition rules adds another layer of financial uncertainty in an already challenging economic environment.
The business community is now waiting to see whether the federal government will review the proposed tax minimum in response to the industry backlash.
This report draws on original reporting by Wire report.
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