Today the Government is releasing an exposure draft of legislation for the Simplified Tax System for small business, which starts on 1 July 2001.
This legislation implements the Governments commitment to assist small business by simplifying rules for determining income and deductions and reducing compliance costs through less complex rules for stocktakes. Small business will also benefit from being able to immediately write off purchases costing less than $1000 and the pooling and accelerated depreciation of other depreciable assets (except buildings).
Since the Government announced the Simplified Tax System, it has been consulting with small business representatives. In light of small business input, the Government has decided to make the following changes to the operation of the Simplified Tax System:
- allowing businesses with a turnover of less than $1 million access to the STS if they have assets (other than land or buildings) with a written down value of less than $2 million;
- allowing depreciable assets (excluding buildings) with lives of more than 25 years to be pooled and written off at 5 per cent per annum;
- allowing businesses to use ATO guidelines to estimate stock values rather than do a physical stocktake;
- broadening the eligibility rules, for example, to allow for unusual income or changed circumstances, to simplify readmission to the Simplified Tax System and to group only related businesses in determining eligibility; and
- providing scope to include some high turnover/low margin businesses.
The release of exposure draft legislation provides the opportunity for comment and again demonstrates the Governments commitment to consult on the implementation of its business tax reforms.
The exposure draft legislation, the explanatory statement and additional information can be obtained from the Treasury website (www.treasury.gov.au/businesstax). To facilitate introduction of the legislation into Parliament, written comments should be made by 17 November 2000. These comments should be sent to:
Assistant Commissioner
Law Design & Development (Simplified Tax System)
Australian Taxation Office
PO Box 900
CIVIC SQUARE ACT 2608
Small businesses and their advisers who would like more information on the Simplified Tax System can call the Treasury Tax Reform Help Line on 13 63 20 or visit the Treasury website.