The start of the new financial year is no barrier to the government passing and enacting the proposed Division 296 tax to start collecting revenue from 30 June 2026, according to a senior technical specialist.
BT head of financial literacy and advocacy Bryan Ashenden said the strong standing of the Albanese government in both houses of parliament following the recent federal election landslide meant it could progress the tax bill with little hindrance and not change its commencement date, despite the fact it was at the end of next month.
“In terms of the start date, remember this bill was due to start from 1 July of this calendar year and that has not passed yet. At the same time, we don’t actually know what the next sitting days [for parliament] are going to be and when this legislation will pass,” Ashenden said during a briefing for advisers today.
“Does that mean the start date could be pushed out? I think there is certainly a chance, but there is certainly no requirement.”
He pointed out the original start date had already been altered between the draft legislation and what was brought to parliament, but there were no obligations to make further changes.
“The government previously said it wanted to give people time to adjust their position to deal with this new legislation, which was why they were originally trying to get it through and done by 1 July 2024 to give people 12 months,” he said.
“They don’t have to do that and if the legislation does not pass until after 1 July, it could have an effective start date back to that day.
“The reason for this is because the calculation of the tax doesn’t actually take effect until the end of the first full financial year, that is, until after 30 June 2026, because you are making a comparison between the opening and the closing balances.
“So it’s certainly still a possibility they could put it through and not change the start date.
“Many will obviously hope that they do, but we will need to wait and see.”
