In response to the rising risk of inflationary pressures, CPA Australia has urged the Australian government to extend temporary tax relief to individuals in its pre-budget government submissions report.

The senior manager of tax policy at CPA Australia, Elinor Kasapidis, said she wants to see the government extend the low and middle income offset cut as Australians in the lower-income bracket requires extra breathing room from inflation for another year.

It recommends the federal government to extend “LMITO to 2022/23 to provide targeted financial relief for these individuals”.

Speaking on the fourth episode of the professional accounting body’s “With Interest” podcast, Ms Kasapidis said, “The issue we are tackling is really about who is saving, who has the money and who will be impacted the most by the rising inflation. When we look at those low and middle income households, they’re going to bear the biggest brunt”.

No matter, it’s a low income sole trader or a middle income household, all of them are going to see it in their pocket before spending on things. She believes that Australians, particularly those on low and middle income, need a bit of breathing space from inflation to save what they could at their best. Their income primarily goes to what they need, rather than spending on recreational goods and activities.

We have to work on the recommendation 22 of CPA Australia’s pre-budget government submission report. It recommends that the government should consider further extension of the low and middle income tax offset (LMITO) to address the ever-rising inflationary pressure after the pandemic.

CPA Australia’s recommendation acknowledges that the “extension of the LMITO to 2022/23 financial year will help maintain a double-dip tax cut for eligible taxpayers. Also, extending it will ease the cost of living pressures for low and middle-income families.