Prime Minister Kevin Rudd will make a bold pitch for the small business vote by promising to cut their GST returns from quarterly to once a year. Taking head on Opposition Leader Tony Abbott’s long-standing promise to reduce the business red tape burden by $1 billion a year, Mr Rudd will say any business with an annual turnover of $20 million or less would only have to file a Business Activity Statement annually. At present, that only applies to businesses with $2 million turnover. The change, to be announced during a blitz of seats in western Sydney on Friday, would begin on July 1, 2014, and benefit 1.35 million small and medium-sized businesses. It will build on promises Mr Rudd made to small business on Thursday in which he vowed to remove the burden of administering superannuation and paid parental leave by centralising the tasks in government agencies. More small business announcements are expected in coming days as Mr Rudd strives to flesh out his pledge to create jobs in a diversifying economy. Mr Rudd’s BAS commitment is the biggest shift on goods and services tax administration since John Howard responded to small business anger soon after introducing the tax in 2001 by introducing the $2 million threshold for annual BAS returns. SMES SPEND 500 HOURS A YEAR ON TAX OBLIGATIONS It is in direct contrast to the onus Labor has placed on big business in recent budgets by requiring them to calculate their corporate tax liability monthly to bring forward payments and prop up the federal budget. Tax groups are becoming increasingly angry about the growing burden of tax and regulatory compliance, which has effectively turned them into unpaid revenue collectors for the government. Studies suggest Australian small businesses spend an average $12,000 a year on GST costs, or almost 60 per cent of their entire compliance burden. Counterparts in the UK, Canada and South Africa spend only 40 per cent, according to a study by University of NSW professor Chris Evans and the University of Tasmania’s Philip Lignier. The Institute of Chartered Accountants’ tax counsel, Paul Stacey, last year said a small business spends an average of $32,389 a year to manage state and federal taxes, a figure that has more than doubled over the past 17 years. Mr Rudd said research suggested small and medium enterprises spend almost 500 hours a year on their tax obligations. He said under his BAS changes, businesses could pay simple instalments based on GST paid in the previous year. “This aligns GST more closely with the pay as you go income tax system and means businesses will no longer have to make complex GST calculations throughout the year,’’ he said. GST instalments could be varied as circumstances change. PROMISE ON PARENTAL LEAVE ADMINISTRATION He promised to consult on allowing refunds of GST credits throughout the year for businesses in a net GST refund position. “This will be important for many businesses who would otherwise choose to lodge returns through the year just to get a refund,’’ he said. On Thursday, Mr Rudd promised to extend the Small Business Superannuation Clearing House to businesses with fewer than 100 employees from July 1, 2014. The service is free. He also sought to shut down one Coalition criticism by adopting Mr Abbott’s proposal to centrally administer paid parental leave. Mr Abbott’s $5.5 billion-a-year scheme would be paid and administered through the government’s Family Assistance Office. Labor’s scheme, which provides the minimum wage for 18 weeks, is administered by each business. On Thursday, Mr Rudd promised businesses with fewer than 20 employees would have their parental leave administered through Centrelink. “This will slash red tape and compliance costs for more than 700,000 businesses,’’ he said.
Posted on: Fri, 23 Aug 2013 00:06:49 +0000
Trending Topics
Recently Viewed Topics
© 2015