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SUPPLEMENT

SALARIES TAX

Summary of Adjustments


A. Changes to allowances and deductions
Before 1998-99 concessions ($) Present


($)

 Proposed
2003-04
($)		 2004-05
($)
   
Personal Allowances:    
Basic     100,000     108,000     104,000    100,000
Married     200,000     216,000     208,000    200,000
Single Parent       75,000     108,000     104,000    100,000

   
Additional Allowances:    
Child:    
1st to 2nd child      27,000      30,000      30,000     30,000
3rd to 9th child      14,000      15,000      30,000     30,000
Dependent Parent/Grandparent:    
Basic      27,000      30,000     30,000    30,000
Additional allowance
(for dependant living
with taxpayer)		        8,000      30,000     30,000    30,000
Dependent Brother/Sister      27,000      30,000     30,000    30,000
Disabled Dependant      25,000      60,000     60,000    60,000

   
Deductions:    
Self-Education Expenses     20,000     40,000    40,000    40,000
Home Loan Interest              -  150,000 (1)  100,000  100,000
Elderly Residential Care Expenses              -    60,000   60,000    60,000
Contributions to recognised retirement schemes              -    12,000   12,000    12,000
   
(1)  The maximum amount of deduction for home loan interest was raised from $100,000 
       to $150,000 for the years of assessment 2001-02 and 2002-03.
B. Revision of tax bands and rates

Before 1998-99 concessions Present

Marginal Tax Band Marginal
Tax Rate
(%)		 Marginal Tax Band Marginal
Tax Rate
(%)

First $30,000
     chargeable income		   2.0 First $35,000
     chargeable income		   2.0
Next $30,000   8.0 Next $35,000   7.0
Next $30,000 14.0 Next $35,000 12.0
Remainder 20.0 Remainder 17.0

Standard Rate (%) Standard Rate (%)

15.0 15.0
 

C. Proposed

2003-04 2004-05

Marginal Tax Band Marginal
Tax Rate
(%)		 Marginal Tax Band Marginal
Tax Rate
(%)

First $32,500
     chargeable income		   2.0 First $30,000
     chargeable income		   2.0
Next $32,500   7.5 Next $30,000   8.0
Next $32,500 13.0 Next $30,000 14.0
Remainder 18.5 Remainder 20.0

Standard Rate (%) Standard Rate (%)

15.5 16.0

Effect of the revision of the marginal tax bands and rates on tax payable for the first $120,000 chargeable income
Chargeable
Income

($)

 Cumulative
income ($)		 Present 2003-04 2004-05
Rate Tax
($)		 Cumulative
tax ($)		 Rate Tax
($)		 Cumulative
tax ($)		 Rate Tax
($)		 Cumulative
tax ($)
First 10,000 10,000 2.0% 200 200 2.0% 200 200 2.0% 200 200
Next 10,000 20,000 2.0% 200 400 2.0% 200 400 2.0% 200 400
Next 10,000 30,000 2.0% 200 600 2.0% 200 600 2.0% 200 600
Next 2,500 32,500 2.0% 50 650 2.0% 50 650 8.0% 200 800
Next 2,500 35,000 2.0% 50 700 7.5% 187 837 8.0% 200 1,000
Next 2,500 37,500 7.0% 175 875 7.5% 188 1,025 8.0% 200 1,200
Next 2,500 40,000 7.0% 175 1,050 7.5% 187 1,212 8.0% 200 1,400
Next 10,000 50,000 7.0% 700 1,750 7.5% 750 1,962 8.0% 800 2,200
Next 10,000 60,000 7.0% 700 2,450 7.5% 750 2,712 8.0% 800 3,000
Next 2,500 62,500 7.0% 175 2,625 7.5% 188 2,900 14.0% 350 3,350
Next 2,500 65,000 7.0% 175 2,800 7.5% 187 3,087 14.0% 350 3,700
Next 2,500 67,500 7.0% 175 2,975 13.0% 325 3,412 14.0% 350 4,050
Next 2,500 70,000 7.0% 175 3,150 13.0% 325 3,737 14.0% 350 4,400
Next 10,000 80,000 12.0% 1,200 4,350 13.0% 1,300 5,037 14.0% 1,400 5,800
Next 10,000 90,000 12.0% 1,200 5,550 13.0% 1,300 6,337 14.0% 1,400 7,200
Next 2,500 92,500 12.0% 300 5,850 13.0% 325 6,662 20.0% 500 7,700
Next 2,500 95,000 12.0% 300 6,150 13.0% 325 6,987 20.0% 500 8,200
Next 2,500 97,500 12.0% 300 6,450 13.0% 325 7,312 20.0% 500 8,700
Next 2,500 100,000 12.0% 300 6,750 18.5% 463 7,775 20.0% 500 9,200
Next 2,500 102,500 12.0% 300 7,050 18.5% 462 8,237 20.0% 500 9,700
Next 2,500 105,000 12.0% 300 7,350 18.5% 463 8,700 20.0% 500 10,200
Next 2,500 107,500 17.0% 425 7,775 18.5% 462 9,162 20.0% 500 10,700
Next 2,500 110,000 17.0% 425 8,200 18.5% 463 9,625 20.0% 500 11,200
Next 10,000 120,000 17.0% 1,700 9,900 18.5% 1,850 11,475 20.0% 2,000 13,200
Effect of adjustments on different income groups
Annual income Total no. of 
taxpayers		 Increase over present in 
average tax liability per month		 Effective tax rate
after implementation of adjustments
2003-04 2004-05
$100,001 to $200,000 500,000   $30 $60 1.2%
$200,001 to $300,000 316,000   $100   $230   3.4%
$300,001 to $400,000 190,000   $190   $410   5.0%
$400,001 to $600,000 149,000   $350   $730   8.1%
$600,001 to $900,000 69,000 $650   $1,330     12.0%  
$900,001 and above 66,000 $1,220     $2,260     15.2%  
Total 1,290,000      
Effect of adjustments on different households
Present Tax
in a year
($)		 Monthly tax increase
over present		 Effective tax
rate after increases		 Total increase
in effective tax rate
2003-04 ($) 2004-05 ($)
Annual Income $105,000
1. Married couple with 2 children and 1 dependent parent living with the taxpayer - - - - -
2. Married couple with 1 child - - - - -
3. Single Person 0

1.7     

8.3     

 0.1% 0.1%

Annual Income $192,000
1. Married couple with 2 children and 1 dependent parent living with the taxpayer - - - - -
2. Married couple with 1 child - - - - -
3. Single Person 4,830 103.9 230.8 4.0% 1.4%

Annual Income $400,000
1. Married couple with 2 children and 1 dependent parent living with the taxpayer 2,730 105.6 255.8 1.5% 0.8%
2. Married couple with 1 child 15,680   297.1 626.7 5.8% 1.9%
3. Single Person 39,140   407.9 838.3 12.3%    2.5%

Annual Income $800,000
1. Married couple with 2 children and 1 dependent parent living with the taxpayer 68,380   684.6 1,401.7   10.7%    2.1%
2. Married couple with 1 child 83,680   797.1 1,626.7   12.9%    2.4%
3. Single Person 107,140     907.9 1,738.3   16.0%    2.6%

Annual income levels below which
no salaries tax is payable
2003-04 2004-05
No dependent parent / grandparent
Single $104,001 $100,001
Married $208,001 $200,001
Married + 1 child $238,001 $230,001
Married + 2 children $268,001 $260,001
Married + 3 children $298,001 $290,001

No dependent parent / grandparent and having incurred mortgage interest of
$100,000 for residence
Single $204,001 $200,001
Married $308,001 $300,001
Married + 1 child $338,001 $330,001
Married + 2 children $368,001 $360,001
Married + 3 children $398,001 $390,001

Including two dependent parents / grandparents
Single $164,001 $160,001
Married $268,001 $260,001
Married + 1 child $298,001 $290,001
Married + 2 children $328,001 $320,001
Married + 3 children $358,001 $350,001

Including two dependent parents / grandparents both living with the taxpayer
Single $224,001 $220,001
Married $328,001 $320,001
Married + 1 child $358,001 $350,001
Married + 2 children $388,001 $380,001
Married + 3 children $418,001 $410,001

Having incurred an expense of $60,000 for one dependent parent living in an
elderly home
Single $164,001 $160,001
Married $268,001 $260,001
Married + 1 child $298,001 $290,001
Married + 2 children $328,001 $320,001
Married + 3 children $358,001 $350,001

Including one dependent parent/grandparent and having incurred an expense
of $40,000 in attending a training course at an approved institution
Single $174,001 $170,001
Married $278,001 $270,001
Married + 1 child $308,001 $300,001
Married + 2 children $338,001 $330,001
Married + 3 children $368,001 $360,001

Including one dependent parent/grandparent living with the taxpayer and one
disabled dependent brother/sister
Single $254,001 $250,001
Married $358,001 $350,001
Married + 1 child $388,001 $380,001
Married + 2 children $418,001 $410,001
Married + 3 children $448,001 $440,001

Single parent with
1 child $238,001 $230,001
2 children $268,001 $260,001
3 children $298,001 $290,001

Annual income levels above which salaries 
taxpayers enter the standard rate zone
2003-04 2004-05
No dependent parent / grandparent