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BAS - One Small (first) Step for Commonsense...

Publication date: 22 Feb 01 | Source: THE TAX INSTITUTE

"The measures as announced relieve average Australians of some of the burden imposed by the PAYG and GST measures by:

  • providing additional time to do the paper work,
  • reducing number of major accounting exercises for small GST business to one by aligning the annual BAS with income tax returns,
  • removing quarterly GST calculations for small businesses with turnovers under $2 million via GDP option,
  • reintroducing a form of quarterly provisional tax for all GST registered individuals, which removes complex PAYG calculations, and
  • letting people with minor tax liabilities out of the system.

    It is also a win for Treasury and the Tax Office as it maintains the integrity of the system and will lower administration costs" says Mr Conwell.

    "However, a number of suggestions put forward to the Government to even further simplify the PAYG system have inexplicably not been adopted. Accordingly, many individuals who were previously paying provisional tax on an annual basis will still be caught up in the quarterly payment system. These are people whose annual tax payable is less than $8,000, but who are in partnerships that are GST registered."

    "I do not understand why the Government did not go all the way and break the nexus between GST and PAYG", he said. "It adds a level of complexity to what could have been a very simple rule. As things stand, we have 2 rules for those paying less than $8,000 tax – annual if you are not GST registered or in a GST registered partnership or quarterly if you are."

    "The Taxation Institute also suggested that the $8,000 level, which has existed for over a decade, should have been increased in line with inflation. This simple change would have eliminated a lot of paperwork for thousands of low income taxpayers", he said.

    "Overall, a mark of 7 out of 10", he said. "As such, this is merely a first step along the tax simplification road promised by the Government at the last election".