Treasurer Wayne Swan and Assistant Treasurer David Bradbury announced a three-year process this morning to reform the timing of company tax payments to better align with GST payments, taking payments monthly instead of the current quarterly payment system.
Businesses with turnover of more than $A1 billion will be required to pay tax monthly from January 1, 2014.
Companies with turnover of $100 million or more will have an extra year to prepare for the change, while the timing for companies with turnover of more than $20 million will have until January 1, 2016 before the change takes effect.
This measure will affect about 350 companies from 2014, about 2500 companies from 2015 and about 10,500 companies from 2016.
The total tax paid by companies will not change.
“This reform will make the tax system more responsive, efficient, and consistent by better matching tax collections with the economic conditions faced by business,” Swan and Bradbury said in a statement.
“Affected companies will pay smaller tax installments immediately following months when business is down, and larger installments when business is strong.”
A consultation paper will be released by early next year.
Meanwhile, falling commodity prices have resulted in the government revising down resources rent tax estimates, including the Minerals Resource Rent Tax and the Petroleum Resource Rent Tax, to $5.4 billion, a 24% fall.
“This number is well down on the FY13 budget forecast of $7.16 billion, but could be lower still in reality, given current commodity price dynamics and doubts over what the resource majors will actually pay in MRRT in the wake of Gillard Government concessions and state government moves to increase royalty-related imposts,” Patersons Securities chief economist Tony Farnham wrote in a note this afternoon.
Net revenue from the MRRT is expected to be $2 billion in 2012-13, $2.4 billion in 2013-14, $2.1 billion in 2014-15 and $2.6 billion in 2015-16.
Farnham said there were plenty of contentious areas and he expected much debate in the coming days.
“The projections have more optimism attached to them than a Cronulla Sharks or St Kilda supporter
saying their team will win the premiership in 2013.”
