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The Impact of the Introduction of the GST on Small Business In Australia

The Impact of the Introduction of the GST on Small Business In Australia This study examines the impact of the introduction of the Goods and Services Tax GST on small business in Australia in the context of the experiences faced in similar countries overseas. Using a case study methodology, data was gathered from six small businesses that were observed throughout the introductory period of the new tax system. In particular, this article considers the costs for small businesses in complying with the new tax system. Businesses reported actual GST compliance costs ranging from 3,331 to 30,140 per business in the cases examined. For the two smallest businesses, their compliance costs amounted to over 3 of the firm's reported annual turnover. The study also identified significant ongoing record keeping and accounting costs that are required by small businesses in order to meet their GST obligations. These findings indicate that governments need to be more aware of the impact of tax reforms on small businesses if they wish to implement changes with minimal adverse impacts on business operations. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asian Review of Accounting Emerald Publishing

The Impact of the Introduction of the GST on Small Business In Australia

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1321-7348
DOI
10.1108/eb060751
Publisher site
See Article on Publisher Site

Abstract

This study examines the impact of the introduction of the Goods and Services Tax GST on small business in Australia in the context of the experiences faced in similar countries overseas. Using a case study methodology, data was gathered from six small businesses that were observed throughout the introductory period of the new tax system. In particular, this article considers the costs for small businesses in complying with the new tax system. Businesses reported actual GST compliance costs ranging from 3,331 to 30,140 per business in the cases examined. For the two smallest businesses, their compliance costs amounted to over 3 of the firm's reported annual turnover. The study also identified significant ongoing record keeping and accounting costs that are required by small businesses in order to meet their GST obligations. These findings indicate that governments need to be more aware of the impact of tax reforms on small businesses if they wish to implement changes with minimal adverse impacts on business operations.

Journal

Asian Review of AccountingEmerald Publishing

Published: Jan 1, 2002

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