New Government incentive empowering small businesses to save energy costs and increase sustainability.
The Albanese Government has introduced a new tax incentive for small businesses to invest in energy efficiency and electrification, aimed at helping them drive down energy costs. The initiative is set to provide businesses with an additional deduction on investments of up to $100,000 made during the 2023-24 financial year.
Under the Small Business Energy Incentive, eligible businesses with a turnover of less than $50 million can claim a 20% bonus tax deduction on expenditures that support electrification and more efficient use of energy. This could include investments in upgrading to more efficient fridges and induction cooktops, installing batteries and heat pumps, and electrifying heating and cooling systems.
The Government estimates that around 3.8 million businesses could be eligible for the incentive, with the measure costing $314 million and potentially unlocking $1.5 billion in investment to improve Australia’s energy performance.
The initiative is seen as a timely relief for small businesses struggling with high energy prices, and it is hoped that improved energy performance will result in ongoing power bill savings for businesses, while at the same time helping Australia lower emissions. The bonus tax deduction could help small businesses take control of their energy costs in the short term and build better, more resilient businesses in the long term.
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