Tax incentives proposed for small businesses’ digital and tech programs

Treasurer Jim Chalmers. Image credit: @JEChalmers on Twitter

The Australian government issued draft legislation Monday to introduce two tax incentives that would allow small businesses to train and upskill employees and improve their digital and tech capacity. 

The bill, which was released for public consultation, provides productivity measures that were included in the March 2022 budget but have not been legislated. 

The Technology Investment Boost and the Skills and Training Boost, which amount to over $1.5 billion, will be backdated to 29 March 2022 so that small businesses can receive the full benefits. 

According to a press release issued by Treasury, small businesses with an annual turnover of less than $50 million will be able to tap into a bonus 20 per cent deduction for eligible expenditure on external training of employees by providers registered in Australia, until 30 June 2024. 

A 20 per cent deduction will also be accessible to support the adoption of digital technologies, until 30 June 2023. 

The media statement, issued by treasurer Jim Chalmers, Minister for Small Business Julie Collins and Assistant Treasurer Stephen Jones, said the bill seeks to alleviate the expenses of training employees for small business owners, helping them recoup some of the costs of the investments they make in their employees and digital operations. 

Interested stakeholders have until 19 September to provide feedback on the draft legislation. 

The bill is expected to be introduced into Parliament later this year, Treasury said in its statement. 

The exposure draft legislation and explanatory materials are available on the Treasury website.