From hwlebsworth.com.au: The Federal Government plans to amend the Income Tax Assessment Act 1997 to disallow tax deductions for General Interest Charge (GIC) and Shortfall Interest Charge (SIC) imposed by the ATO on or after 1 July 2025.

This change aims to deter clients from delaying tax payments and addresses the rising tax debt owed to the ATO, which has nearly doubled in recent years.

The proposed rules will significantly increase the effective interest rates clients pay, as they will no longer benefit from tax deductions on these charges.