CPA Australia today welcomed the comments from the federal government about simplifying the BAS.
"It is most encouraging that the Prime Minister has made these positive remarks about the necessity for changing the Business Activity Statement," senior tax counsel Paul Drum says.
"We look forward to working further with the government on fine-tuning the process and the form so that we can reduce the tax compliance costs for business, while enabling the government to continue to achieve its revenue goals."
Drum says CPA Australia has been working with the Tax Office and the government on an ongoing basis in an effort to simplify the current requirements.
"Now that we have passed the first deadline for the second quarterly BAS, we are in an even better position to argue for the changes," he says.
"It is now clear to all that they are necessary, with many businesses having to struggle to meet the current requirements."
However, he also noted that "there are many businesses who have adapted to the system, and although not happy with being unpaid tax collectors, have found other business benefits from accurate quarterly reporting".
Drum emphasises he expects fine-tuning of the BAS to continue for some time, as part of the ongoing process of achieving a smooth, simpler new tax system.
"It will take time to smooth out all these issues. It is unlikely the current round of discussions will be the final word," he says.
As part of its bid to simplify the BAS process, CPA Australia is seeking:
- To limit the amount of quarterly information supplied in three of the quarterly BASs to two boxes: the amount of GST payable and the input-tax credits being claimed. The rest of the compliance/statistical information need only be supplied at the end of each income year.
- The introduction of a choice for almost all quarterly lodgers to a non-instalment rate method for determining quarterly PAYG instalments. Businesses could elect to lodge PAYG annually, or quarterly using the GDP-adjusted tax method, eliminating the need for any quarterly PAYG calculations. With payments being based on the tax paid in the previous year, the correct 12-month income tax liability would finally be determined by the business or the ATO with the end-of-year income tax return. Any difference could easily be refunded or collected at this time.
- Introducing a permanent BAS extension to the end of each quarterly month.