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Time to make GST compliance easier?

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

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