Small businesses catch tax break
The Federal Government has announced a deferral of some small business tax liabilities in the first half of 2009, with over one million small businesses likely to qualify for the tax relief.
The news will be well received by the small business community, and are a sign that the government recognises the cash flow difficulties that the economic slowdown presents for smaller employers and contractors, according to the Australian Chamber of Commerce and Industry (ACCI). “While the decision is a deferral and not a reduction in tax liabilities, it will come at an important time in 2009 when cash flows are expected to be tight, and small businesses will be struggling to hold employment levels and meet fixed costs,” ACCI Chief Executive, Peter Anderson, said.
“It complements other measures already in place that have benefit to small businesses, not the least of which are the recent interest rate reductions and the first round of the stimulus package,” Mr Anderson added. “These influences should help bolster spending in the lead-up to Christmas and New Year in the retail and hospitality sectors, which are crucial trading periods for many small businesses.”
These and other measures were discussed with the government by Australia’s Chambers of Commerce and Industry and Industry Associations at the Prime Minster’s recent Small Business Summit in Queensland, and at forums convened by the Minister for Small Business, Independent Contractors and the Service Economy, Dr. Craig Emerson.
“ACCI will continue to pursue with the government practical measures to help provide a much needed stimulus to business in 2009,” Mr Anderson advised. “The initiatives proposed by ACCI have included tax cuts and proposals including an investment type allowance to help maintain business investment levels at a time of slowing economic growth.”
The tax relief involves a 20 per cent cut on pay-as-you-go tax on small business for the last part of this year. Businesses that have less than $2m in annual turnover will be allowed to postpone 20 per cent of their PAYG instalment – due in the first two months of 2009 – until they make their annual return.
It will benefit 1.3 million businesses, according to Prime Minister Kevin Rudd.