The Australian Chamber of Commerce and Industry (ACCI) is calling on the Federal Government to drop the proposed minimum 30% tax on discretionary trusts.
“We must help people understand the consequences of this tax hit before the Government tries to rush it through Parliament,” ACCI CEO Andrew McKellar said.
“This tax is an unprovoked assault on small and family businesses around Australia, raising $4.5 billion for government coffers each year.”
READ MORE: This change was among several tax reforms in the 2026-27 Federal Budget
How this affects small business
According to ACCI, small businesses contribute almost a third of national gross domestic product and about 240,000 use discretionary trusts to protect assets, manage irregular income, distribute profits and support the continuity of family-owned enterprises across generations.
The proposed minimum 30%, paid by the trustee on trust income, is substantially higher than the average personal income tax rate currently paid by beneficiaries under existing flow-through arrangements.
The average small business trust earns about $161,000 a year. That income split between two beneficiaries would mean they each pay around $29,300 in total tax.
Under the Government’s proposed reforms, the bill would jump to about $48,300.
“This tax is not about hitting high-wealth individuals, it’s about hitting your local tradie, café owner or hairdresser,” McKellar said.
“These are hardworking Australians who don’t deserve to be hit with high taxes and red tape.”
Many businesses could be forced to restructure due to the changes.
“The cost of consulting with lawyers and accountants to restructure trusts into company structures can run into the tens of thousands of dollars,” McKellar said.
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