An unanticipated bonus for some farmers in this week's federal budget is the prospect of a rise in the luxury car tax refund for eligible primary producers and tourism operators.
It may pay to delay a planned farm family four-wheel drive purchase until the new financial year.
However, possibly not so welcome is a warning about the Australian Tax Office getting more funds to crack down on the cash "black" economy and undeclared business and wage payments.
The luxury car tax (LCT) applies to vehicles with a GST-inclusive value above the LCT threshold which increased to $66,331 this financial year - up from $65,094.
That price threshold easily places farm four-wheel drives such as the popular Toyota Land Cruiser or Nissan Patrol seven seater "wagons" in the "luxury" bracket, despite often being sought by rural dwellers because they can tow heavy loads and negotiate remote, rough or wet road conditions.
Land Cruiser prices typically start at about $63,000 and top out at $78,000, with the average list price about $70,000.
Producers eligible
Primary producers and tourism operators can currently be eligible for a partial refund of up to $3000 of the LCT paid on eligible four-wheel or all-wheel drive vehicles.
However, vehicles acquired after July 1 will qualify for a potential refund of up to $10,000 in the wake of this year's budget.
The criteria and types of vehicles eligible for the partial refund remains unchanged.
Financial advisory and accountancy network, Bentleys, has noted primary producers and tourism operators would do well to consider deferring eligible cars until after July 1, when the increase in the LCT refund would potentially apply.
Australia, which absorbs about 1300 new Toyota Land Cruiser wagon and workhorse model sales a year, has long been a big market for the Japanese car giant, accounting for more than 10 per cent of global Cruiser sales since 1954.
Meanwhile, the government is allocating more funding to seek out and collect unpaid taxes and unpaid superannuation obligations to employees.
A $42m boost to assist the ATO is likely to target larger businesses and high wealth individuals, but Bentleys has sounded the warning to all employers.
It also highlighted measures being stepped up to tackle unreported business transactions via the "black economy".
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New compliance measures will force Australian Business Number (ABN) holders with income tax return obligations to lodge their tax returns or else lose their ABN, after July 2021.
From July 2022 ABN holders must also provide annual confirmation of ABN details being correct.
The aim is to ensure swifter compliance with tax obligations and thereby disrupting the black economy by enforcing touchpoints with government.
Creative tax strategies
More funding has also been given to the ATO to undertake audits and reviews.
The government is continuing a campaign to target aggressive tax planning strategies which may be carried out by multinationals, large public and private groups, including trusts and high wealth individuals.
An additional $1 billion in funding has been allocated for 2020 to 2023 to undertake reviews and investigations.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
