Australia's National Tax and Accountants' Association (NTAA) has warned business taxpayers using the 'simplified' Goods and Services Tax (GST) return that they risk 'massive penalties and financial hardship' when the Australian Taxation Office (ATO) begins its audit.
The NTAA released a statement last week denouncing the new GST business activity statement introduced late last year.
According to Ray Regan, President of the NTAA: 'It is our belief that once the honeymoon period is over for GST implementation, and the ATO start GST audits, we will see thousands of taxpayers suffering massive penalties for incorrectly calculating their GST liability. Many taxpayers who used the simplified GST accounting method in their business activity statement return will be like lambs to the slaughter once they are audited by the ATO.'
Mr Regan also said that the complexity of the business activitiy statements that must be completed each month by tens of thousands of businesses will see them lose out in unclaimed sales tax refunds worth millions. Businesses who submitted their December forms and did not claim the one-off GST/sales tax refund will have forever lost their entitlement to the refund.
Mr Regan explained: 'With over 1,000 amendments to the GST legislation since it was first introduced, together with the significant on-going adminstration burden that businesses have had to endure in preparing their business activity statements, sadly, many businesses will have forgotten about this looming GST/sales tax refund deadline and therefore they will lose thousands of dollars. In total we estimate that businesses will collectively lose millions of dollars in unclaimed GST/sales tax refunds.'
In response the Australian Taxation Office has said that the business activity statement document will be reviewed in February. With the likely pressure the government will feel when the GST returns start to flood in and a national election due this year, it is no surprise that the Australian Prime Minister, John Howard, has also indicated his support for reviewing the GST forms.
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