Japan · Asia Post
Labor is putting pressure on the tax office to reverse its decision not to accept credit card payments amid a growing backlash, insisting the ATO help small business operators manage critical cashflow after a ban on surcharges. Government ministers took credit for a decision by the Reserve Bank to ban surcharges for credit card payments from the start of this month, a move the central bank estimated would save consumers about $1.6bn. Card surcharges had been used to cover the cost charged by banks and credit card companies for processing payments.
On 1 October, the tax commissioner, Rob Heferen, announced moves to stop accepting credit card payments for tax bills from 1 December. He said continuing to accept card payments would cost the ATO almost $200 million a year, as those costs can no longer be passed on to card users. But some business owners, particularly smaller operators, use credit card payments as a cashflow tool, managing their liabilities by using credit when required.
Because tax liabilities are legislated by federal parliament, the ATO says it cannot build card payment costs into charges paid by taxpayers. Estimates suggest about 5% of small businesses use credit card payments for tax bills. Heferen said a two-month transition period would allow operators to make other arrangements, including taking up existing free and low-cost payment methods already in place .
Amid anger from small business operators and the federal opposition, pressure has been building on the government to intervene. “Small business needs this facility in place,” the Australian Chamber of Commerce and Industry boss, Andrew McKellar, said. “They’ve got to manage cash flow.
What they are looking for is for one clear, consistent approach and solution from government.” ATO officials met with business representatives again on Thursday. The housing minister, Clare O’Neil, said the ATO needed “to go back and talk to business about what they’ve decided to do here. “The government does have some real concerns about what the ATO is proposing to do here,” O’Neil told Channel Nine on Thursday.
“Cash flow is the biggest thing that’s often of concern for small business, and using credit cards to pay tax bills is a way that a lot of people are just managing that issue,” she said. On Wednesday, the small business minister, Anne Aly, said she wanted the ATO to talk with businesses operators to “find a way forward”. Assistant minister Andrew Charlton defended the ban on Thursday, saying it provided consistency between the private sector and government payments.
But he stressed business operators needed “flexibility” on tax payments. “I know that flexibility is important, and that’s why the ATO is seeking to provide flexibility through those types of payment plans that have relatively low interest rates compared to credit cards,” he told News 24. “The government has asked the ATO to continue to consult with small business to make sure that that flexibility is provided.” The opposition leader, Angus Taylor, has urged the treasurer, Jim Chalmers, to intervene, even referring to Charlton as the “de facto treasurer”.
“Where’s Jimmy on this one? We’re not hearing much from Jim at the moment,” he said. “He seems to be in hiding, so we’ve been hearing from Andrew Charlton instead.”
Source: The Guardian
