New ATO scheme will pay small retailers to report their GST monthly

The Australian Taxation Office (ATO) will pay twenty small retailers to report and lodge their GST obligations on a monthly cycle, as it investigates new ways to improve tax performance among local SMEs.

Starting in July, a new paid pilot program will ask small retailers which report and pay GST on their quarterly Business Activity Statements (BAS) to accelerate their payment frequency over a six-month period.

Business will be asked to fill in a pre-pilot survey, undertake one-on-one consultation with ATO staff, and undertake a post-pilot debrief and survey.

The ATO is actively seeking businesses in both regional and metropolitan Australia to take part.

It is not currently clear how much small businesses will be compensated for their time.

The tax office says the trial will investigate the “hypothesis” that monthly GST reporting will improve tax performance — that is, compliance and timeliness — compared to existing quarterly and annual payment options.

Around 96% of Australian small businesses pay GST quarterly, with 4% choosing to file a monthly BAS.

“Small businesses that lodge monthly appear to have better on-time lodgment performance,” an ATO spokesperson said.

The ATO believes monthly reporting may help small businesses stay on top of their obligations by giving the tax office up-to-date insights on business performance.

Businesses taking part will also have “more manageable data and reporting” requirements, the tax office states, with “smaller, more manageable payments towards potential liabilities.”

The focus on boosting small business tax compliance speaks to the ATO’s 2022-2023 focus on enhancing small business tax compliance, as it whittles away at billions of dollars in collectable debt held by SMEs.

Businesses keen to take part have until July 21 to register their interest.