Happy to see some relief for Insurance Taxes in NSW (unless there is yet another back flip)
New South Wales Treasurer Dominic Perrottet says the state’s 2017 budget will relieve cost pressures for 600,000 small businesses in the region through the reduction of red tape, including by axing insurance duty on a range of policies for businesses with annual turnover of $2 million or less. As an aside, I am convinced governments want businesses to stay small for as soon as you grow and of course employ more people you end up paying a lot more government charges with Insurance Taxes being added to the insidious Payroll Tax.
The 2017 budget, which claims to deliver a $4.5 billion surplus, pledges to relieve cost of living pressures for families and business owners, and includes a $318 million plan to improve the viability of small businesses by removing insurance duty for commercial vehicle, professional indemnity, product and public liability, and crop and livestock insurance from January 1, 2018.
This will mean businesses with an aggregate turnover of up to $2 million will be encouraged to “take up more appropriate levels of insurance by removing the disincentive caused by higher insurance premiums”, according to the budget papers.
Insurance duty is paid to the state government by insurance providers and is calculated as a percentage of the policy premium. According to the Office of State Revenue, in NSW this can mean additional fees, which are often passed on to policy holders, range from 2.5% to 9% depending on the policy type.
Of course this is all dependent on the NSW Government honouring their word and not doing a back flip as they so cruelly did just one month out with the Emergency Services Levy.