AUSTRALIA is set to hit Australia’s highest corporate tax rate for the first time in decades with the new levy, with the top rate of 35 per cent on income earned over $2 million.

The new rules will also affect foreign direct investment and some capital gains tax, with both measures being phased in over the next five years.

The Australian Taxation Office (ATO) said it will publish its final details of the tax regime in the coming weeks.

The government has been under pressure to make changes to the tax system, with opposition parties and the opposition leader, Bill Shorten, warning it will damage Australia’s economy and hurt Australian jobs.

However, the government has defended the new tax regime, saying it will be the fairest and most effective tax system in the world.

The top rate will rise from 35 per.cent to 39 per cent from July 1, 2019, while the top rates on dividends and capital gains will also increase.

It will also introduce a new levy on overseas profits, which will raise $1.6 billion a year.