GST compliance costing small businesses

Australian small businesses are spending more than half their total internal compliance costs on GST compliance at 58 per cent, compared with 40 per cent for small businesses in Britain, Canada and South Africa.

According to an Institute of Chartered Accountants' tax research report, the cost of collecting GST to a small business is just under $12,000 per year, with GST compliance costs around 50 per cent higher in Australia than overseas.

"On average, it costs Australian small businesses $11,950 per year just to collect GST. We need to ensure that any future changes to tax policy, including the GST, do not have the effect of increasing this real dollar cost to businesses," Institute of Chartered Accountants tax counsel Paul Stacey says.

The research also indicates that more businesses are obliged to charge GST compared to South Africa and Britain, as the GST registration threshold is lower in Australia.

Further reading:

Retailers rejoice at potential GST changes for online parcels

Small business tax registrations

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