In an effort to combat the challenges faced by small business regarding tax compliance, Labor frontbencher, MP Andrew Leigh, has proposed funding be established for 10 free tax clinics across the country to assist micro-businesses and low-income taxpayers in understanding their tax obligations.
The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell has welcomed the proposal. Carnell suggests while the clinics would not replace the services of an accountant or bookkeeper they would assist small businesses in understanding the complexities required to be compliant.
“However, as around 88% of businesses in Australia are micro-businesses, many would benefit from additional support in understanding their tax and superannuation obligations,” Carnell said.
“Small businesses struggle with the complexity and regular changes in the tax system, such as the proposed Single Touch Payroll reporting and Taxable Payments Reporting System.
“Add to this issues like the imposition of garnishee orders and the denial of Australian Business Numbers, as was highlighted in the Fairfax/Four Corners report this year, and you can see the value that free advice via tax clinics might provide.”
Carnell suggested each clinic’s practice manager would need to be skilled in both tax and the wider issues confronting small businesses to ensure that good tax advice is provided.
“It would also be preferable if the clinics were established beyond just the capitals, into the regional areas that are doing it tough, with a focus on business people who have English as a second language.
“A secondary effect of the clinics is they will provide university students with hands-on experience with micro-business tax issues and an insight into the challenges of compliance by small businesses.”