ACCOUNTING bodies have called on the Australian Tax Office to be more lenient with small and mid sized businesses that breach their GST obligations.
The call follows the release of data in the ATO’s 2003 annual report showing that small businesses have been hit by the shift from an educational focus to a stricter compliance focus.
SMEs were asked to pay an additional $257 million plus $7 million in penalties following GST audits.
Micro businesses were also affected, having to pay an additional $323 million plus $15 million in penalties, while large businesses were assessed for $234 million in additional payments and paid just $9,000 in penalties.
The Institute of Chartered Accountants in Australia WA regional manager, Con Abbott, said the ATO should adopt a one-strike approach to enforcing breaches of GST.
“The ATO has done an enormous amount to educate businesses about their GST obligations,” he said.
“However, the ICAA believes the ATO should revert to a lenient approach with first-time offenders.
“Fines are not the answer for first-time offenders that have made inadvertent errors.”
Hayes Knight GTO director Joe Graziano said the ATO had been very active in the compliance area, especially for new businesses with high establishment costs, which may qualify for a GST refund.
He said most SMEs used a bookkeeping service for their monthly or quarterly returns and engaged their accountant for an annual review.
