Simpler tax for small business

This budget includes a number of measures to reduce tax compliance costs for small business. These initiatives build on the measures in the 2006-07 Budget which reduced compliance costs and extended access to tax concessions to small business.

From 1 July 2007, businesses with turnover below $75,000 need not register for the GST. Those who voluntarily register will have the option of reporting and paying GST annually. In addition, from 1 July 2008, taxpayers who voluntarily register for GST and choose to report and pay GST annually, may also pay their pay as you go instalments annually.

Such taxpayers would only need to lodge a Business Activity Statement once a year.

From 1 July 2007, more small businesses will be able to apply to access a simplified accounting method for calculating their GST. This will generalise the arrangement that has been implemented for food retailers, small restaurants, cafes and caterers.

For purchases of $75 or less, businesses will no longer require a tax invoice to claim a GST credit. This will be of particular benefit to smaller businesses, which will need only one set of documents

for these purchases for both income tax and GST purposes.

From 2007-08, small businesses with excise obligations will be able to settle these on a monthly, rather than weekly, basis.

To assist new businesses to keep good records and understand their tax requirements, including the GST, the Australian Taxation Office will be provided with $40 million over four years to provide more face to face assistance through visits to start‑ups.

The GST changes will require the unanimous agreement of the States and Territories.