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Reducing the corporate tax rate for small to medium businesses has great benefits, but it may bring some unintended consequences in terms of the franking rules. In essence, the progressive lowering of the tax rates may have the effect of locking any tax paid at a higher company rate in the franking account, to which shareholders lose access. However, careful planning over the next few years can ensure that shareholders still extract the maximum benefit from the tax that the company has paid at the higher rate.