Home topics news Credit: Sergei Wing News News Supportive tax initiatives tackle rising insolvencies Yajush Gupta May 30, 2023 The timing of the Federal Government’s tax amnesty for small businesses in Australia is highly advantageous, especially considering the recent surge in insolvencies during the current financial year. Startling data reveals a substantial 25 per cent increase in business insolvencies, underscoring the urgent need for supportive measures. Earlier, in a promising move, the Australian Tax Office (ATO) committed to alleviating the burden on select small businesses by eliminating failure-to-lodge penalties. This beneficial initiative applies to enterprises with an annual turnover of less than $10 million. Moreover, the ATO has gone a step further by introducing payment plans to facilitate the settlement of accrued taxes. The much-needed relief for small businesses arrives at a critical juncture, as recent data released by the Australian Securities and Investments Commission (ASIC) paints a troubling picture. According to ASIC’s findings, a staggering 6,144 Australian businesses have already been placed into administration during the current financial year, representing a significant 25 per cent increase compared to the previous year. This increase is even more concerning because the financial year is still ongoing, highlighting the urgency for effective measures to address this distressing trend. Among the states, New South Wales (NSW) has been hit the hardest, experiencing a distressing 77 per cent surge in business administrations from April 2022 to April 2023. The number of administrations in NSW skyrocketed from 1,422 to 2,520 during this period, illustrating the