Time to make GST compliance easier?   Leave a comment

The Australian Labor Party has announced that from 1 July 2014 businesses with turnover of less than $20m will be able to lodge their GST activity statements annually http://www.alp.org.au/cutting_red_tape_reducing_the_burden_of_the_gst.

That’s ten times the current threshold of $2m.

There is no option for NZ small to medium sized businesses to lodge GST returns annually. A business with a turnover of less than $500,000 may lodge it’s NZ GST returns on a 6 monthly basis (2 returns per year). For turnovers up to $24m businesses in NZ can lodge GST returns on a two monthly basis (6 returns per year). Above $24m and they have to lodge returns every month.

I think an annual return option should be available in New Zealand and the threshold should be higher than $500,000. I don’t know what the proper level would be but the IRD will have data about business numbers etc needed to work that out.

A profitable business turning over just $500,000 each year with standard employment costs might have net GST of about $45,000 payable each year (depending on a number of factors). While payments can be required to be made periodically (as is the case in Australia) is it really necessary for that business to incur the cost of two returns each year?

Iain

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: