Plan for annual BAS lodgement is shortsighted
The Government's proposal to cut quarterly reporting requirements and allowing small businesses to submit an annual Goods and Services Tax (GST) statement instead comes with a number of pitfalls, according to the Institute of Public Accountants.
"We are supportive of government initiatives that reduce the regulatory burden faced by small business but this is one initiative that is riddled with danger signs," said IPA chief executive officer, Andrew Conway.
"Any business that does not keep on top of its financials including the GST is playing with fire.
"Whilst not having to actually calculate the actual GST may sound attractive it's a backward step in encouraging businesses to keep up to date with their financial records.
"Business Activity Statements are not just used for reporting GST; they are also used for reporting pay as you go (PAYG) instalments, PAYG withholding and fringe benefits tax.
"The taxman still has to be paid; a cheque still needs to be written.
"Businesses will still need to track GST in case they are in a refund scenario to ensure they are not being short changed.
"During hard times, small businesses which are not on top of their financial management can easily find themselves in a tax debt situation, which can ultimately threaten their existence," said Mr Conway.