Claims by The Australian newspaper that the Government will collect more, not less, revenue under changes to the BAS reporting system are wrong.
The claim made in todays Australian is based on the omission of critical facts. If a business with a turnover of $2 million or less chooses to move to the annual reporting system for GST, then it can base quarterly payments on its December actual payment. However, if it believes that would result in an overpayment, it has the power to vary its instalments and pay less, provided that by the end of the year its varied payments are within 15 per cent of the actual amount.
No business is required to pay more than its annual liability. In fact, it is required to be within 85 per cent of its annual liability under the variation rules.
The ability to vary was announced at the press conference of 22 February 2001 and in the press release announcing the changes and has constantly been reiterated by the Government. It means that a business which adopts the new system can vary down if it believes the December payment is abnormal or too high. The article fails to make any mention of the variation option.
Of course, a business which does not adopt the new system can pay the actual amount of GST by doing quarterly returns. Under this system, there is no overpayment because it is the actual liability that is paid.
Australian Taxation Office advice is that the new system will cost revenue, not add to it.
The report in todays Australian is simply wrong.