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Prime Minister John Howard has indicated adjustments to the Business Activity Statement process are possible, following strong lobbying from business and industry groups. The accounting profession has been increasingly critical of the new tax system's central reporting document, especially the compliance provisions small and medium businesses are subject to. "We are closely looking at how people are handling the compliance of this and I am not going to allow a situation where there are ongoing areas of legitimate complaint, particularly by small business," Howard says. "The government, in consultation with the Tax Office and others, will be looking very closely about whether there are areas where you can further simplify it but without, of course, robbing yourself of the capacity of getting the information you're entitled to have under the new system." He says businesses need to currently focus on getting their next BAS in on time. The second quarterly BAS, which also includes the last chance for businesses to claim Wholesale Sales Tax credits for stock on hand on July 1 last year, is due on Sunday, February 4. Both the Australian Taxation Office (ATO) and Howard have confirmed businesses mailing their statements at the end of this week will not be penalised for an arrival in the mail on Monday. "My understanding is that they're not going to sort of put the meat cleaver down if you don't have it in exactly on the same day," Howard says. Tax Commissioner Michael Carmody says his officers will take a "common sense approach" to BASs in Monday's mail. Howard says the transition to the new system has been "remarkably smooth". "There were always going to be some challenges in adapting to the new system. "I made that clear back in July of last year and you can't go over to a huge new system like this without there being some challenges," he says.