Australia Aims To Cut Small Business Compliance Burden

by Mary Swire, Tax-News.com, Hong Kong

12 February 2007

Australian Treasurer and Minister for Small Business and Tourism, Peter Costello, has released draft legislation containing proposals to reduce compliance burdens for the country's small businesses.

The proposals will standardise the eligibility thresholds for small business tax concessions from 1 July 2007. Currently, separate eligibility tests exist for GST, the Simplified Tax System, capital gains tax (CGT), fringe benefits tax (FBT) and pay-as-you-go (PAYG) small business concessions.

Under the proposals, any business with annual turnover of less than A$2 million will be able to access these concessions, subject to any additional criteria set out in the particular concessions.

"Small businesses will only have to apply one eligibility test to access a range of small business concessions," Costello said last year November when the government announced the initiative.

"This demonstrates again the Government’s commitment to reducing red tape and compliance costs for small businesses," he stated.

Small businesses meeting the $2 million annual turnover test will not need to make any further decisions to enter into the new arrangements, nor will they be obliged to adopt any concessions not suited to their requirements. Any business meeting the new small business definition will be able to choose those concessions that meet its business needs.

According to the Treasurer, a single definition of small business will result in reduced compliance costs for some 2 million Australian small businesses, or 96% of all Australian businesses, effectively giving small firms a A$150 million tax cut.

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