WA81

Government set to release discussion paper on 'dividend tax'

The Government is due to release a discussion paper on the subject of the taxation of small owner-managed businesses at the time of the Pre-Budget Report, which has been set at 2 December.

In the 2003 Pre-Budget Report, the Chancellor outlined the Government's determination to ensure that 'the right amount of tax is paid by owner-managers of small incorporated businesses on the profits extracted from their company, and so protect the benefits of low tax rates for the majority of small businesses.'

The Government subsequently introduced a 19% minimum rate of corporation tax on distributed profits in April 2004.

The 2004 Budget Report stated that a discussion paper will be issued at the time of the 2004 Pre-Budget Report, to ensure that the tax system 'reflects the realities of today's changing labour market and business environment'.

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