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.
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Melissa works for Griffith University.
Current at 1 September 2014
Richard works for Department of Accounting, Finance and Economics, Griffith Business School, Griffith University.
Current at 1 May 2014
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