The federal government confirmed on Wednesday that small businesses will be the first to benefit from the authored tax reform.

An estimate of 720,000 small businesses will receive an early reduction in the company tax rate from 30 per cent down to 28 per cent from the 2012/2013.

It was known that small businesses were gravely affected during the global economic crisis, according to the budget statement released on Tuesday.

The statement added the proposal will allow eligible businesses to reinvest more in their profits to develop its operations.

On the other hand, large corporations will take their fair share of one per cent reduction in the company tax starting in 2013/2014, to 29 per cent, then another cut by the following year to 28 per cent.

The measure will be taken from the earnings received on the Resource Super Profits Tax (RSPT).

Media reports have stated that Treasurer Wayne Swan continued his communication with the mining executives. Majority of the mining key players have hoped for the abandonment of the 40 per cent tax on super profits.

Mr. Swan reiterated that revenue from the tax will boost the whole economy, including the national savings.

“It will also ensure our community charges a fairer price for our finite resources,” Mr Swan said.

The federal government expected that a resource taxation, combined with the cut in the company tax rate, will increase gross domestic by 0.7 per cent and will gain its after-tax real wages by 1.1 per cent.

“In current terms, this reform dividend is equivalent to an extra $450 per year in the pocket of a full-time worker on average weekly earnings,” Mr. Swan said.

Small businesses will be permitted to write-off assets and other assets valued under $5000, up from $1,000, except buildings, with a decrease rate of 30 per cent.

Mr. Swan explained the movement will change depreciation calculations, which will benefit 2.4 million small businesses