Calls by CPA Australia for a GST overhaul to compensate for funding shortfalls have been meet met with criticism from small businesses in Australia.
Research published by the leading accountancy group has revealed that Australia would be $27.5 billion a year better off with a 15 percent GST on everything.
State branches of the Property Council of Australia and the Real Estate Institute are one of many industry commentators also proposing a long-awaited review of Australia’s taxation system.
The current system requires a 10% GST to be applied to most products and services within Australia with the exclusions of education, food and health. It has remain unchanged since it was first introduced by the Howard government in 2000.
The CPA report pointed to the economic benefits of a lifted GST to “fund the removal of other, more inefficient taxes” such as vehicle stamp duty, income tax, insurance and motor vehicle taxes.
Although a higher GST could generate additional revenue and increase household income, small businesses are making a plea to be freed from a GST red tape.
A survey conducted by accounting firm, Bentleys, revealed almost 70 percent of SMEs opposed to lifting the GST.
Software firm, MYOB, also carried out a survey estimating that the average small business owner spent up to 84 hours a year collecting GST from the Government.
Concerns surrounding time and money have been raised by small businesses who bear the grunt of GST compliance as they lack the advanced administrative systems of large corporations.
Currently, there are 124 countries out of 200 who have GST rates higher than Australia’s 10 per cent – these include the UK at 20 percent, Germany at 19 percent and New Zealand with 15 percent. Hungary has the highest rate at 27 per cent.
