Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

MYOB proposes easy tax reform

MYOB has proposed “simple” GST reforms it says will save small businesses both time and money after conducting research which found GST compliance costs Australian SMEs close to $14 billion every year.

News Staff Reporter 24 February 2015
— 1 minute read

Surveying 1,026 SME owners and managers, the software provider found SMEs spend an average of 84.1 hours a year on taxation compliance. This, MYOB said, equates to $6,778 a year for each of the estimated 2.02 million SMEs and non-employing businesses in Australia – or $13.7 billion a year across all SMEs.

Advertisement
Advertisement

MYOB chief executive Tim Reed said the government needs to better understand the impact the GST has on the running of a small business.

“If Australia is to have a debate on the GST, then let’s start with the way it is collected and reported. Let’s look at ways to ease the cost and burden on SMEs.

“The GST represents two full weeks where the owner’s attention is dragged away from the day-to-day running of their business. This is a significant drain on the productivity and profitability of SMEs,” said Mr Reed.

“If the government’s focus is on improving Australia’s productivity and reducing red-tape, then easing the burden of GST compliance should be a priority,” he added.

Mr Reed called on the Australian government to make a simple and effective reform of the GST by abolishing the requirement to provide additional information on GST-free transactions.

“We need to simplify the GST so that small business operators need only determine if a transaction is one where GST applies or if it is GST-free.”

“The need to allocate a GST-free code to each transaction results in uncertainty, confusion and compliance risk. It has nothing to do with the GST the company is required to pay,” he said.

“This reform would bring Australia in line with New Zealand where there is no requirement to report additional details about GST-free transactions, making it easier for small business to comply.”

Mr Reed said Australian businesses currently spend twice as long on GST compliance than businesses in New Zealand.

"A New Zealand SME needs 39 hours on average to comply with the GST each year, compared to 84 hours by Australian SMEs," he said.

“Removing the requirement to report and classify every GST-free transaction is a sensible and modest reform that could be achieved through regulation, avoiding a more difficult political path of negotiation through parliament.”

MYOB proposes easy tax reform
image intro
accountantsdaily logo

 

Are you thinking of expanding your offering into SMSFs to grow your client base? Become a pro at SMSF fundamentals and make your clients bulletproof with the SMSF Foundations course. Learn directly from Aaron Dunn from Smarter SMSF as he deep-dives into the fundamentals you need to know to successfully undertake your work as an SMSF practitioner. Earn up to 21 CPD hours! Learn more

News