The Federal Government has announced a tax law amendment allowing small businesses a 20 percent reduction in PAYG (pay-as-you-go) obligations. This will result in reduced quarterly payments for most businesses.
The Australian Tax Office requires businesses to calculate payments based on GDP forecasts, but most businesses would need to wait until the end of the year for any refunds due to the economic downturn.
Assistant Treasurer Chris Bowen said the cut “will alleviate small business taxpayers of this cash flow pressure in the current economic environment and provide immediate and much-needed cash flow relief and encourage small business confidence”.
Businesses eligible for the reduction include those that:
- Pay their PAYG instalments quarterly using the Tax Office calculated instalment amount printed on their activity statement / instalment notice; and
- Are carrying on a business that has an annual turnover of less than $2 million; or
- Are in receipt of income from a partnership or trust that is carrying on a business that has an annual turnover of less than $2 million.
The reduction includes the quarter to 31 December 2008.
See the Australian Tax Office website for further details and conditions of eligibility: www.ato.gov.au