Online tax revamp for small business

Uptake by business owners of a dedicated online tax portal created by the tax office has been slower than expected, Tax Commissioner Michael D’Ascenzo says.

“The take up of the business portal has been well below potential,” D’Ascenzo said in a speech delivered in Hobart yesterday. “We are looking at how we can increase the attractiveness of the portal to business through the services available, making the security process easier and leveraging off our new small business assistance program.”

The tax office has devoted significant resources to improving its service offering to small business since a report released earlier this year that businesses with less than $2 million annual turnover owe more than $6 billion in tax debts – two thirds of the total owed to the tax office.

Andrew Gardiner, a spokesman for the National Tax & Accountants’ Association, says the main explanation for the lower uptake of online tax portals by business owners is that they often rely on tax agents to do it for them.

“The tax system is complex, and generally more so for business owners than individual tax payers. Small business people have bigger things to worry about than fiddling about with tax, so they generally rely on tax agents or accountants to lodge for them,” Gardiner says.

Reducing the huge tax debt owed by small business owners is a tough challenge for the tax office, Gardiner says. “The hard part for the ATO is these systems are created for the people who do the right thing and have an accountant, but many of the people they’re targeting are hard to find and engage.”

D’Ascenzo announced the tax office was working on several new measures to improve the uptake of the online business portal and make the tax information provided to business owners easier to understand and act on.

A revamped business online tax portal will be launched in 2009 that will allow business owners or their tax agents to manage their debts online, including entering into repayment arrangements, and lodge superannuation guarantee statements.

Business owners can already use the portal to download a range of payment slips and view, vary and lodge quarterly PAYG and GST quarterly installments.

The tax office has already had some limited success in limiting the growth of debt owed by small business, D’Ascenzo said, with the growth rate of new debt falling from 6.4% in 2005-06 to 5.4% in 2006-07, and collections of superannuation guarantee charges exceeding forecast results by 5.6%.

The Federal Government also announced today that it has launched the first tender process for the implementation of the standard business reporting program (SBRP), a key component of which will be an easy-to-use online portal for lodging government documents.

The objective of the SBRP is to cut red tape by allowing businesses to lodge information at just one point rather than having to duplicate compliance efforts across the many government departments.

The benefits in red-tape savings to business upon full implementation of the program are estimated at close to $800 million per year.