Deduction Cap For Managing Tax Affairs


In 2016-17, 69 people earned over $1 million but paid no tax. Labor will make our tax system fairer by capping the size of tax deductions people can claim for “managing tax affairs”.

Most Australians don’t get to choose how much tax they pay – or don’t pay. But some at the top end of town have been able to under Scott Morrison’s Liberals.

There were 26 people who earned over $1 million and paid no tax had an average deduction of $630,000 for managing their tax affairs.

These people should not get a tax break just because they have access to loopholes their experts can help them with.


Labor will cap the amount an individual can claim as a deduction for managing tax affairs at $3,000.

This deduction and cap affects individuals only, and other business-like structures such as trusts and partnerships that are taxed as individuals, and not companies.

A carve-out is included for individual small businesses with positive business income and annual turnover up to $2 million.

When announced, it was estimated that this would affect around 82,000 people. That’s less than 1 per cent of the population.

For over 6 million Australian taxpayers, their average deduction was just $375.

These are just some of the ways we are closing tax loopholes used by the top end of town.

These reforms will save around $375 million over the forward estimates.