Small businesses are paying twice as much money and spending four times as many hours as they did 17 years ago in order to comply with Australia's tax regulations, new research says.
A report released today by the Institute of Chartered Accountants showed it costs small businesses an average of $32,389 each year to comply with state and federal taxation laws.
"For small businesses, the cost of tax compliance has more than doubled over the last 17 years," ICA tax counsel Paul Stacey said.
"On average, it costs small businesses $11,950 just to collect GST, bringing to light the question of whether they are acting as unpaid tax collectors for the government.
"In addition, small businesses are spending four times as many hours per year complying with tax obligations as they did 17 years ago."
Mr Stacey said the report also showed special tax concessions for small business were largely ineffective, with 75 per cent of respondents to the research that knew about the concessions saying they were too complex to pursue.
"The tax compliance burden placed on small businesses has serious impacts on their long-term sustainability, particularly when the cost and time required for compliance is still growing," he said.
"The federal and state governments need to address this issue in order to ensure the tax system can meet Australia's social and economic needs in the future."
The report is the first of a three-part analysis on the complexity of Australia's taxation system.