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Australia Planning Medicare Levy Hike

by Mary Swire, Tax-News.com, Hong Kong

14 May 2013


The Australian Government will this week introduce legislation to increase the Medicare levy, the funds from which will pay for its new disability insurance scheme.

The levy will rise from 1.5 percent to 2 percent of taxable income from July 1, 2014. The additional revenue will be invested in the DisabilityCare Australia Fund. AUD9.7bn (USD9.7bn) will be allocated to Australia's States and Territories, to reimburse spending on the scheme.

The draft legislation is being considered by lawmakers ahead of its introduction, with the Government hoping that this will facilitate its prompt passage through parliament.

A number of minor consequential bills will follow, to amend the tax laws relating to fringe benefits tax and excess contributions tax, and to ensure the integrity of the tax system. Each resultant tax rate change must be presented in a separate tax law amendment bill, for constitutional reasons.

TAGS: tax | revenue guidance | law | insurance | fringe benefits | Australia | Health tax | legislation | tax rates | tax reform

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