Small business should have access to ongoing compensation to offset the cost of a vastly more complex GST, says the Australian Society of Certified Practising Accountants tax director Angela Ryan.
“The new shape of the tax package, which makes food GST free, is much more complex than the Federal Government’s original proposal,” Ms Ryan said.
“We estimate GST-free food will impose an additional $100 million in compliance costs every year and this will be borne disproportionately by small business. The Treasurer has now confirmed this figure.
“It is important the government does not just throw a one-off cash payment at small business to compensate for the impact of the GST, but instead sets in place an ongoing system to prevent costs crippling this sector.
“While the negotiated package is far from ideal for small business there are steps Parliament can take to assist.
“This compensation should recognise the disproportionate burden that small business will face.”
Ms Ryan said one option would be to provide compensation on the basis of a small business’s turnover of GST-free goods.
This way, small business will not wear the costs of amendments to the original GST proposal.
“The Australian Democrats’ food amendments already provide for financial compensation for small business. The spirit of this principle should still stand in the new package,” Ms Ryan said.
“A workable and ongoing system must be negotiated to prevent this sector unnecessarily bearing the highest burden of the tax and losing faith in the new system,” she said.
