2021/22 Federal Budget

1. Personal income tax changes

1.1 Retaining the Low and Middle Income Tax Offset (‘LMITO’) for the 2022 income year

The Government has announced that it will retain the LMITO for one more income year, so that it
will still be available for the 2022 income year. Under current legislation, the LMITO was due to be
removed from 1 July 2021.

The LMITO is a non-refundable tax offset that provides tax relief for low and middle income
taxpayers and is available in addition to the Low Income Tax Offset (‘LITO’).

The LMITO is proposed to apply as follows for the 2022 income year.

Consistent with current arrangements, the LMITO will be applied to reduce the tax payable by
individuals when they lodge their tax returns for the 2022 income year.