GST ‘easier to implement’

Press, 22 June 1985, Page 9

GST ‘easier to implement’

PA Auckland The goods and services tax will be easier to implement now the Government has accepted most of its recommendations, says the chairman of the advisory panel, Dr Donald Brash. The panel’s most important recommendations suggested a higher threshold liefore GST is applied, an option for less frequent reporting and an option for accounting on a cash basis.

“These will simplify compliance with the tax and the Government accepted them almost completely,” Dr Brash said.

The advisory panel recommended a threshold of $20,000, but the Government went for a figure of $24,000. This did not concern Dr Brash.

“We struck a balance between the two extremes, $2500 and $50,000, that some people had argued. The figure of $24,000 is totally acceptable. The principle is the same as if it was $20,000.” Dr Brash said the Government would have settled on $24,000 because it was easily divisible by six, tak-

ing into account the twomonthly reporting periods from businesses whose sales are more than $4OOO.

He said his panel received submissions for the threshold to be set at 530,000. “Some of the concern was bordering on anger.” But Dr Brash said at that level some small businesses would be disadvantaged if their turnover was, say, $51,000 and others’ $49,000. Dr Brash said the $20,000 threshold was high enough to exempt most hobbyists, part-time traders and many non-profit organisations, where compliance costs would be out of all proportion to the GST revenue gained.

A recommendation not accepted by the Government was that exporters be allowed an option to report on a weekly basis. Dr Brash was disappointed. “The exporter works on a very small margin and his cash flow would be eased if he were getting refunds from the Inland Revenue more quickly. The Government did, however, accept the monthly option for returns.”