Jim Chalmers introduced the legislation on Wednesday, telling the lower house it would "better align" the tax treatment of work and asset income.
But the government has no prospect of seeing it passed until at least late 2026, amid a Greens' push for an inquiry.
Dr Chalmers announced the plan to impose a 30 per cent minimum tax on trusts in the May budget, arguing the rapid growth in the use of legal structures by wealthy Australians was subverting the tax system and placing a greater burden on workers.
Business groups argue trusts are used for legitimate reasons by many employers, including to protect their assets and arrange succession planning.
The opposition is staunchly against the bill and is unlikely to support it even with changes.
"(Labor) should get out a bit more and talk to their local cafe owner, their local restaurant owner, their local manufacturing businesses, their local real estate agents," Opposition Leader Angus Taylor told reporters in Canberra.
"They'll never get it.
"These people (business owners) are busting arse every day," he said.
The changes would essentially "tax small businesses twice", Liberal Senator Michaelia Cash said.
"They (Labor) are slugging the backbone of the Australian community, our small and family businesses, with yet another tax," she told Seven's Sunrise.
The government needs to get the Greens on side to have any hope of passing the legislation in the Senate.
Greens economics spokesman Nick McKim said the minor party would move for a Senate inquiry to examine carve outs for businesses.
The carve outs would prevent the need for discretionary trusts to be restructured by making fixed distributions to pre-nominated beneficiaries instead, but Senator McKim said it would let people with trusts off too lightly.
"In classic Labor fashion, the government has managed to water down its own position before the legislation has even reached parliament," he said in a statement on Tuesday.
The Greens also have concerns parents who pay private school fees from trust funds could escape the tax.
Dr Chalmers remained upbeat about the bill, downplaying the challenges while fronting media on Wednesday morning.
"There are legitimate reasons for people to have trusts, but they do mean that a small proportion of Australians can manage their tax affairs in ways that aren't available to the vast majority of Australian workers," he told reporters in Canberra.
The treasurer suggested less than 10 per cent of small businesses would be affected by the changes.
