Federal Member for Pearce Christian Porter has today congratulated the Minister for Small Business, The Hon Bruce Billson MP, for his announcement that the Coalition will reduce compliance costs for small businesses by $56 million a year by making changes to the way tax obligations are met and reported.
Mr Porter said an estimated 372,500 small businesses Australia-wide will benefit from the administrative changes to PAYG instalment thresholds.
“The Coalition Government made it clear before the election that we would remove $1 billion worth of red-tape out of the economy and we are delivering on that commitment” he said.
“Having made strong submissions on behalf of Western Australian small businesses as part of the Government’s first Red-Tape Repeal Day that was held on 26 March this year, I am pleased that these changes are being implemented, especially for the many small businesses within my electorate of Pearce.”
As part of the Coalition Government’s Economic Action Strategy the Coalition Government is making it easier for small business to get on with the job of running their business and attending to their customers instead of dealing with needless compliance.
“Already we have removed over 10,000 acts and regulations and more than 50,000 pages from the statue book as part of our first repeal day.” Mr Porter said.
As a result of the changes the Government is making, around 32,500 small businesses that have no GST reporting requirements will no longer have to lodge a business activity statement where to date lodgements have been made only to report PAYG instalments.
The remaining 340,000 small businesses with modest or negative income that are required to lodge a BAS, will no longer have to interact with the PAYG instalment system.
The following threshold changes for the PAYG instalments, which have not been reviewed since 2001-02, are also being considered by the Government:
· increase the business or investment income threshold from $2,000 to $4,000;
· increase the balance of assessment threshold from $500 to $1,000;
· increase the notional tax threshold from $250 to $500; and
· remove the requirement for entities registered for GST to remain in the system even if they have a zero instalment rate.
If taxpayers no longer meet the PAYG instalment thresholds they will be automatically exited from PAYG instalments. The ATO will write to each business and individual to withdraw their instalment rate.
If taxpayers still wish to pay instalments towards their end of year tax liability, they may voluntarily re-enter PAYG instalments by contacting the ATO on 13 28 61.