Further, the burden on Small business to collect the tax for the various Governmental departments especially the tax office, is quite enormous. Currently Small Business collect and pay GST, Income Tax, PAYG Withholding Tax, Land Tax; FBT, Payroll Taxes, Wine Tax, Luxury car tax and stamp duty. On top of that of course Superannuation is also collected in trust for their employees.
The problem is after 22 years of continuous economic growth, Australia now faces the risk of falling incomes and increasing government debt. And our governments' debt levels as a proportion of GDP will rise: from 12.1% in 2011-12 to 59.3% by 2039-40 and to 128.1% by 2049-50. (PwC Report)
We need something that Australia hasn’t seen for a few years – real leadership. Australian governments risk not being able to meet the key needs of our community and a further slide into a debt crisis will occur because our Governments are too focussed on the 3 year turnaround and not the mid to long term outlook. The ‘right way' means increasing those taxes that have the least effect on investment and employment, and at the same time reducing reliance on taxes that distort incentives to work, invest and transact business. It also means addressing those factors which increase the complexity of the tax system and the cost of compliance to small business.
This is an issue that will not go away. As part of a broader community discussion about the challenges Australia faces, we need an informed and intelligent conversation on tax. The Media also have a responsibility to not focus on the minutiae but see the broader future plans. Leaders of civil society, business, unions and the public policy community must drive this conversation if we are to realise the benefits across all parts of society. At Sothertons we see the impact the tax system has on small business and assist business owners plan and profit where ever possible. Call 07 49721300 to talk about your business plan.