Government to ‘slash red tape’ for small businesses

On Wednesday, 23 March, the government pledged to take “decisive action to slash red tape and provide cash flow support” for over 2.3 million small businesses which it said would generate an annual compliance saving of $800 million every year.

The initiative includes lowering tax instalments in 2022-23 to 2 per cent, down from 10 per cent, and also aligning instalment payments with financial performance.

“A lower uplift rate will mean lower instalments, delivering $1.85 billion in cash flow support for 2.3 million small to medium businesses, sole traders and individuals with passive income (including some self-funded retirees) that are eligible to use the instalment amount method,” a statement released on Wednesday read.

“This measure will apply to the 2022-23 income year, in respect of instalments that fall due after the enabling legislation receives Royal Assent.”

The Budget includes measures to leverage technology to automate tax reporting requirements which government said will reduce compliance costs and improve processing times.

Businesses will also be able to calculate pay-as-you-go (PAYG) instalments based on financial performance and be given the option to report taxable payments reporting system data through software at the same time as activity statements.

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.