From 1 July, businesses tendering for Commonwealth government contracts over $4 million will need to obtain a satisfactory statement of tax record (STR) from the ATO.
In order to obtain a satisfactory STR, the business must be correctly registered for an Australian business number, goods and services tax, and tax file number.
It must have lodged at least 90 per cent of relevant income tax, business activity statement and fringe benefits tax lodgements that were due in the last four years of operation from the date of request for an STR, and must not have $10,000 or greater in outstanding undisputed debt due, or have a payment plan in place with the ATO.
Australian Small Business and Family Enterprise Ombudsman Kate Carnell said that while the measure was welcomed, more can be done to assist and protect small businesses subcontracted to these projects.
“It provides small businesses, particularly subcontractors who work further down the supply chain, with some security, but certainly more can be done in the procurement space,” Ms Carnell said.
“Small businesses rely on contracts being awarded to businesses that operate in a fair and sustainable manner.
“The government should also require that tenderers use contracts with subcontractors that comply with unfair contract terms legislation and that all subcontractors are paid on time.
“If businesses do not comply, they should be banned from future tendering for a period of time.”
Tax agents are now able to apply for an STR on behalf of their clients from the ATO via a new online system, with the statement to be generally processed within four business days.