CORPORATE Australia has lashed Labor's shock move to raise $8.3 billion by forcing large businesses to pay tax earlier, warning it could cause a cash crunch and lead to higher compliance costs that would weaken the wider economy.
The business community was blindsided by Canberra's move, the biggest contribution to the savings announced in yesterday's mid-year budget update. The move would hit about 350 large companies with turnovers of $1bn or more from January 2014 by requiring them to pay company tax instalments monthly, instead of quarterly. It will effectively pull about two months' worth of tax instalments for the June quarter, which would have been paid on July 21, into the previous financial year. In 2013-14, about $5.5bn will be pulled forward, more than double the forecast surplus of $2.2bn.
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