GST Compliance a Hidden Cost to SME’s

Recently it has been the various state governments that have been squabbling with the federal government over increasing their share of GST. As well their has been the debate over the GST-free import threshold which many businesses would like removed. There is however another aspect to GST causing discussion and that is the cost of GST compliance.

To quote from an Institute of Chartered Accountants Australia Media Release:

 “On average, it costs Australian small businesses $11,950 per year just to collect GST. We need to ensure that any future changes to tax policy, including the GST, do not have the effect of increasing this real dollar cost to businesses,”  Paul Stacey, Institute of Chartered Accountants Australia tax counsel.

In the media release it is argued that the cost to small business of meeting its GST compliance obligations is around 50% higher in Australia than in other comparable countries with data indicating that the cost to Australian small businesses of GST compliance comprises 58% of total internal compliance costs.

These findings are part of the latest report from an ongoing three-year multi-university tax research project: “Assessing and addressing tax system complexity in Australia”, sponsored by the Institute of Chartered Accountants Australia.

Read more here

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