The ATO says it has listened to the concerns of tax professionals, small businesses, industry associations and software providers, and is working towards reducing GST compliance costs for small businesses.
“We are reducing the amount of GST information required for the business activity statement (BAS) to simplify GST record keeping and reporting requirements,” the ATO says.
From 1 July 2017, small businesses will only need to report the following GST information on their BAS:
- GST on sales (1A)
- GST on purchases (1B)
- Total sales (G1)
The requirement to report export sales (G2), other GST free sales (G3), capital purchases (G10) and non-capital purchases (G11) will be removed.
“A simpler BAS will provide small businesses with significant time and cost savings by simplifying account set up, GST record keeping and BAS preparation,” the ATO says. “Businesses will be able to more easily classify transactions and prepare and lodge their BAS.”
The ATO also contends that a simpler BAS will support greater use of existing automation functions and potential digital solutions as they evolve.
Although separate from the latest Federal Budget announcements, Minister for Small Business Kelly O’Dwyer mentioned the simplification of GST administration measures in a media release about the latest Budget announcements.
“Small businesses will also benefit from changes to simplify BAS reporting requirements,” O’Dwyer says. “From 1 July 2017, all small businesses with less than $10 million turnover will be able to easily classify transactions, and prepare and lodge their BAS.”
O’Dwyer says this simpler approach means that small businesses can work with their tax professionals on growing their business, not form filling. “A trial of the new simpler reporting arrangements will commence on 1 July 2016.”
And as part of the “FinTech” agenda, the government will also undertake a detailed implementation study into the costs and benefits of adopting electronic invoicing (eInvoicing) “so that small businesses spend less time re‑entering invoice data for government and more time developing and growing their business”.
According to the Digital Business Council, eInvoicing could improve efficiency over the traditional paper invoicing process by 60% to 80%, with widespread adoption leading to significant regulatory savings. The findings of the implementation study will be considered in early 2017.