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Review of Tax Impediments Facing Small Business

Background

On 28th March 2014, the Acting Assistant Treasurer, the Minister for Small Business and the Parliamentary Secretary to the Treasurer announced that the Board would conduct a review to identify features in the tax system that are hindering or preventing small businesses from reaching their commercial goals.

The terms of reference given to the Board are available below.

Terms of Reference

I, Mathias Cormann, Acting Assistant Treasurer, together with Bruce Billson, Minister for Small Business, request the Board of Taxation (the Board) to conduct a fast-track review to identify features of the tax system that are unreasonably or unnecessarily hindering or preventing small businesses from pursuing and achieving their commercial goals.

The Board’s report should provide business and broader community perspectives on issues in the tax system that are of most concern to small businesses, and identify the short- and medium-term priorities for small business tax reform in Australia, while noting that frequent change is often cited as a contributing factor to the compliance burden facing small business. In doing so, there should be a particular focus on high priority options for simplification and deregulation.

Recognising that the small business sector is highly diverse, as much as possible the report should focus on aspects of the tax system that unreasonably impede the goals of a broad cross section of businesses, with a particular emphasis on impediments to growing into medium and large business. The Board should not feel constrained to use any specific definition of small business.

To facilitate the production of this fast-track review, we ask that the Board utilise its extensive links with tax professionals and conduct targeted consultation with key business groups. The Board also should work closely with the Treasury and Australian Taxation Office in preparing its report. Further, the report should utilise and build upon the conclusions of the Board’s scoping study of small business tax compliance costs, which was completed in December 2007.

We ask that the Board report to Government by 31 August 2014.

Consultation

In undertaking this review, the Board consulted widely to provide all stakeholders with the opportunity to participate in the review.

The Board appointed a working group of its members comprising Mr John Emerson AM (Chair of the Working Group), Mrs Teresa Dyson and Mr Curt Rendall to oversee the review.

As this was a fast-track review the Board did not issue a discussion paper. Instead the Board sought submissions which identified the most serious tax system impediments that small businesses face in achieving their commercial goals, along with a sense of their relative priority.

Board’s Report

The Board completed its review of tax impediments facing small business and provided its report to the Government at the end of August 2014.

Government response

On 20 January 2015, the Government announced the release of the Board of Taxation’s report on its review of tax impediments facing small business and the Government’s response to the Board’s report.

The Government partially accepted the Boards recommendations. A number of recommendations were supported and were noted by the Government that they would be implemented or were already in the process of being implemented at the time of the report. Some measures required further investigation, to be considered as part of the Tax White Paper Process or were to be the subject of a post implementation review (in particular the review of the Taxable Payments Reporting System). Two recommendations surrounding changes to the Superannuation Guarantee Charge and employer obligations were not supported.

Further information on this review can be obtained from the Board of Tax Secretariat on (02) 6263 4366 or  at TaxBoard@treasury.gov.au.

Submissions received

SubmitterDownload
APL Financial Chartered Accountants50KB
APL Financial Chartered Accountants - Attachment 1674KB
APL Financial Chartered Accountants - Attachment 22MB
AusBiotech178KB
AusBiotech - Attachment 11MB
AusBiotech - Attachment 2481KB
Australian Bookkeepers Network121KB
Australian Chamber of Commerce and Industry739KB
Australian Food and Grocery Council235KB
Australian Motor Industry Federation423KB
Australian Private Equity & Venture Capital Association Limited163KB
Australian Taxi Industry Association2MB
Australian Trucking Association476KB
BDO153KB
Business SA89KB
Certified Practising Accountants Australia365KB
Chamber of Commerce and Industry of Western Australia401KB
Chamber of Commerce and Industry Queensland615KB
Cleary Hoare4MB
Combined Small Business Alliance of WA143KB
Cooperative Research Centres Association35KB
Cooperative Research Centres Association60KB
Deloitte Private137KB
Deloitte Private2MB
Enterprise Network for Young Australians95KB
Greenwood & Freehills131KB
Independent Contractors Australia944KB
Indirectax.net686KB
Inside This World Pty Ltd48KB
Inside This World Pty Ltd61KB
Institute of Chartered Accountants Australia692KB
Institute of Public Accountants927KB
Launceston Chamber of Commerce124KB
Law Council of Australia292KB
Master Builders Australia97KB
McEwan, Chris109KB
National Retail Association741KB
National Retail Association - Attachment 16MB
National Retail Association - Attachment 2185KB
National Tourism Alliance413KB
NSW Business Chamber388KB
NSW Small Business Commissioner1MB
Pharmacy Guild of Australia368KB
PricewaterhouseCoopers160KB
PricewaterhouseCoopers - Attachment 13MB
Regional Australia Institute456KB
Restaurant and Catering Australia992KB
Small Business Association of Australia191KB
Small Business Development Corporation (Government of Western Australia)2MB
The Association of Superannuation Funds of Australia92KB
The Tax Institute211KB
The Tax Institute – supplementary submission424KB

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