Tax concessions for small business should be easy to implement and the Federal Government should make the $20,000 instant tax write off permanent, CCI’s submission to the Board of Taxation’s review of small business tax concessions has recommended.

CCI made eight recommendations to the Board of Taxation, which is currently reviewing tax concessions available for small businesses. It has called for submissions on the current arrangements and will report to the Government in October.

Other recommendations include aiming for tax concessions that promote tax neutrality instead of highly targeted concessions, harmonising the definition of ‘small business’ and considering whether turnover is the best measure of concession eligibility.

CCI also recommended increasing the reporting threshold for PAYG withholding obligations and interaction between Federal and State tax regimes and their implications for small business, especially when it comes to payroll tax.

Businesses told CCI tax compliance placed a disproportionate burden on their business, particularly in terms of costs and time due to the complexity of tax laws. CCI’s submission said small businesses spent one hour on compliance matters per $155,606 earned, compared with one hour per $448,000 earned for medium enterprises. 

“The time, stress and cost in adhering to the tax rules is greater than the costs associated with running the business,” one business told CCI.

“Keep the playing field fair. Don’t advantage those with specialist in-house accountants,” said another.

Sandbox Managing director Grady Habib, who runs a production company, said small businesses were often the greatest innovators because they had the newest ideas and a higher priority should be placed on supporting them to become large companies.

“Let’s take a look at Apple, it started in the backyard of three guys. If you don’t allow innovation, if you burden small business owners with administrative functions, every second they spend printing an invoice or dealing with superannuation or not adding any real value to society it is a waste of energy that should be redirected to focusing on the primary gain which is doing business, finding innovations and growing companies,” he said.

“Right now, the Australian system just burdens and inundates a small business owner who cannot afford to or doesn’t want to have to pay for bookkeeper to push paper, how are they supposed to focus on the real gain?”

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