NO.101

Today the Government is releasing an exposure draft of legislation for the Simplified

Tax System for small business, which starts on 1 July 2001.

This legislation implements the Government’s commitment to assist small business

by simplifying rules for determining income and deductions and reducing compliance costs

through less complex rules for stocktakes. Small business will also benefit from being

able to immediately write off purchases costing less than $1000 and the pooling and

accelerated depreciation of other depreciable assets (except buildings).

Since the Government announced the Simplified Tax System, it has been consulting with

small business representatives. In light of small business input, the Government has

decided to make the following changes to the operation of the Simplified Tax System:

• allowing businesses with a turnover of less than $1 million access to the STS if they

  have assets (other than land or buildings) with a written down value of less than $2

  million;

• allowing depreciable assets (excluding buildings) with lives of more than 25 years to be

  pooled and written off at 5 per cent per annum;

• allowing businesses to use ATO guidelines to estimate stock values rather than do a

  physical stocktake;

• broadening the eligibility rules, for example, to allow for unusual income or changed

  circumstances, to simplify readmission to the Simplified Tax System and to group only

  related businesses in determining eligibility; and

• providing scope to include some high turnover/low margin businesses.

The release of exposure draft legislation provides the opportunity for comment and

again demonstrates the Government’s commitment to consult on the implementation of

its business tax reforms.

The exposure draft legislation, the explanatory statement and additional information

can be obtained from the Treasury website (www.treasury.gov.au/businesstax).

To facilitate introduction of the legislation into Parliament, written comments should be

made by 17 November 2000. These comments should be sent to:

Assistant Commissioner

Law Design & Development (Simplified Tax System)

Australian Taxation Office

PO Box 900

CIVIC SQUARE ACT 2608

Small businesses and their advisers who would like more information on the Simplified

Tax System can call the Treasury Tax Reform Help Line on 13 63 20 or visit the Treasury

website.

CANBERRA

26 October 2000

Contacts: Geoff Miller (ATO)

(02) 6216 1483

Mark O’Connor (ATO)

(02) 6216 1393

Gerry Antioch (Treasury)

(02) 6263 4477