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Tax Cuts from July 1 2024 – for all taxpayers

There has been a lot of media coverage regarding the changes to the tax cuts that were to take effect from July 1 2024, and some media reports have given the impression that high income earners are worse off. It is important to recognise that, yes, the tax cuts for high-income earners have been reduced from what was originally promised, but the new tax rates from July 1 are still lower for all taxpayers than the tax rates currently in place, meaning all taxpayers will see some tax relief from July 1.

The previous government had promised tax cuts that were beneficial to those in all tax brackets; however, the higher income earner was to receive more relief from the tax cuts than the low or middle-income earner, and in my opinion, this seemed too good to be true. The current government has amended these tax cuts so that from July 1, the low- and middle-income earners will receive more relief, whereas the high-income earners, although still receiving a tax cut, will only receive about half of what was originally on offer. We have had inquiries from our clients, friends, and members of the community about how they will receive their tax cut, i.e. will it be a lump sum amount they receive, will it be a boost to their tax refund when they do their annual tax return or will they see the difference in their net pay on payday? For those receiving salary or wages, you will see the difference on payday; the amount of tax your employer withholds from your pay will be reduced, leaving you with more money to spend. Those who are self employed should see an adjustment in their quarterly tax instalments or their annual tax return, depending on their personal circumstances.

Written by Stasha Dunn – StaySharp Accounting

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