❓ Mr Brown asks the Minister for Small Business about the WA Government's position on compensating small businesses for GST collection. The Minister acknowledges transition costs but argues the new tax system ultimately benefits small businesses, negating the need for a collection fee.
AnsweredQoN 524Legislative Assembly
QuestionView source ↗
(1) Is the Minister aware of representations made by the WA Council of Retail Organisations to the Australian Government for small business to be paid a collection fee for collecting the Goods and Services Tax? (2) Does the State Government support a collection fee being provided to small business for this purpose? (3) If not, why not? (4) If so, does the Government intend to make representations to the Federal Government in this regard? (5) If not, why not? Answered on 5 September 2000 The Minister
AnswerView source ↗
Answered
5 September 2000
Response time
20 days
(1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(2) Does the State Government support a collection fee being provided to small business for this purpose? (3) If not, why not? (4) If so, does the Government intend to make representations to the Federal Government in this regard? (5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(3) If not, why not? (4) If so, does the Government intend to make representations to the Federal Government in this regard? (5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(4) If so, does the Government intend to make representations to the Federal Government in this regard? (5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(2) Does the State Government support a collection fee being provided to small business for this purpose? (3) If not, why not? (4) If so, does the Government intend to make representations to the Federal Government in this regard? (5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(3) If not, why not? (4) If so, does the Government intend to make representations to the Federal Government in this regard? (5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(4) If so, does the Government intend to make representations to the Federal Government in this regard? (5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
(5) If not, why not? Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
Answered on 5 September 2000 The Minister Replied: (1) Yes. (2) No. (3) The Commonwealth Government has acknowledged that the initial transition to the Goods and Services Tax (GST) may place some additional compliance demands on small business. However, the move to a new tax system, and as part of this, the introduction of the GST, has been designed ultimately to reduce ongoing compliance costs for businesses. It is misleading to consider the collection aspects of the GST in isolation to the significant benefits that the new tax system will deliver to business. There should be some real cost reductions for small business as a result of the GST, including lower corporate and individual tax rates, the ability to claim back business input taxes, diesel fuel rebates and grants and cash flow advantages associated with holding the GST payments of customers. These measures should benefit most small businesses. Furthermore, a range of taxes and associated administrative requirements will be progressively removed including wholesale sales tax, FID, provisional tax and some stamp duties. In addition, a range of tax forms have been consolidated into a simple reporting form - the Business Activity Statement - covering the GST, the Reportable Payments System, Pay as You Go instalments and FBT, amongst others. Further, the new tax system will introduce other measures that should significantly reduce ongoing compliance requirements for small business. In particular, the Simplified Tax System will be available to all small businesses with a turnover of less than $1 million and should bring about reductions in compliance and accounting costs for small businesses. Under the Simplified Tax System, small businesses can elect to operate a simple cash accounting system as opposed to the more complex accruals system. Small business will also be able to pool depreciable assets, immediately write-off items costing less than $1,000 and simplify their trading stock regime, as an alternative to annual stocktaking and stock valuation. All of these things should reduce their accounting and compliance costs, enabling them to spend more time on business activities. There are also a whole range of new accounting and software tools available to small businesses which should further reduce the time and costs involved in complying with GST requirements. It should also be emphasised that the benefits to small business associated with improving their critical accounting and bookkeeping processes, including cash-flow, debt collection and general financial management, extend well beyond meeting the requirements of the GST. For all of these reasons I do not believe the payment of a GST collection fee to business to be warranted. (4) Not applicable. (5) Not applicable
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