shopping_cart

Your shopping cart is empty

Cash flow benefit from GST: Is it realised by small businesses in Australia?

Published on 01 Sep 14 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE

When introducing the GST the Federal Government expressed that there would be the potential for business operators to gain a cash flow benefit from holding the GST revenue collected before remittance. However, it is not clear whether this has been realisable by all business sizes especially small businesses. Considering that small businesses are a major contributor of employment in the private sector and recognised as being capable of having a significant influence on future economic stability of the nation, it is important to determine how the GST affects small business cash flow and assess whether a benefit is in fact obtained.

This article reports a multiple case study of small (including micro) businesses with annual turnover of less than $10 million and a full time work force of less than 20 employees. The research explored whether small business participants perceived that there was a cash flow benefit from holding the GST liability for a period of time before it was due to be paid to the Australian Taxation Office. Findings suggest that the realisation of cash flow benefit for businesses trading with other businesses appears to be restricted, particularly as a result of terms of trade with other businesses.

Author profiles:

Author Photo - Brett FREUDENBERG
Brett FREUDENBERG
Brett is a Associate Professor, Department of Accounting, Finance, and Economics, Griffith Business School, Griffith University, Brisbane, Australia.
Current at 1 April 2017
Click here to expand/collapse more articles by Brett FREUDENBERG.
 
Melissa Belle Isle
Melissa works for Griffith University.
Current at 1 September 2014 Current at 10 September 2014

Richard Copp
Richard is a Senior Lecturer, Department of Accounting, Finance, and Economics, Griffith Business School,Griffith University, Brisbane, Australia.
Current at 1 April 2017 Current at 09 April 2017 Click here to expand/collapse more articles by Richard Copp.

 

Copyright Statement