Simpler tax reporting on its way

A number of SMEs are set to benefit from changes to BAS reporting this tax season, as the industry pushes for greater simplification around cumbersome tax reporting and accounting processes.

The ATO revealed in a press statement that from 1 July 2017, businesses with a turnover below $10 million will automatically be transferred to the Simpler BAS system.

This means that the only GST information that will need to be provided to the tax office from now on is G1 total sales, 1A GST on sales and 1B GST on purchases made.

This means that information on the following is no longer required: 

  • G2 Export sales
  • G3 GST-free sales
  • G10 Capital purchases
  • G11 Non-capital purchases

If you are completing a paper submission, these sections can be left blank.

However, the ATO made a point of noting that no other changes to the form, tax reporting or the frequency of reporting is being made.

The announcement comes after an in-depth discussion of the tax landscape for businesses at the Small Business Association of Australia Summit, which highlighted that the tax system is overly complex for SMEs and requires substantial reforms to enable taxation to work alongside, rather than against, businesses.

“If small business succeeds, then the economy succeeds; and we need to build a system where people can create their own wealth,” said Anne Nadler, founder and CEO of the Small Business Association of Australia (SBAA).

“We are falling behind by world standards as to how we are being assisted by government. We are incredibly capable, however we are struggling through regulation and the high cost to do business.”

Anthony Cerantonio, principal at Forensic Accounting Group, said the government would be “failing small business in this country” if it doesn’t seek to reduce the tax red tape burden.

“I feel that it would be a smart idea to propose a three-year, tax-free moratorium for all start-up businesses. It won’t cost the ATO a lot as most businesses first three years have carried forward losses – the ATO will not lose out.”

However, Australian Small Business and Family Enterprise Ombudsman (ASBFEO) Kate Carnell stressed that business owners should not make an enemy of the tax office.

Instead, she encouraged business owners to maintain open lines of communication for their own benefit, noting that the ATO is very accommodating in providing payment solutions and arrangements for SMEs when needed.

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