Wednesday, 9 September 2015

Are you ready for the proposed GST changes?

The topic of GST reform has sparked widespread debate with NSW Premier Mike Baird’s recent announcement he is backing a proposed lift to the GST from 10 to 15 per cent. So are you ready for the changes possibly headed your way? And why is it important that you, as a budding tax professional, keep abreast of any new tax developments, however initial they may appear?

In his proposal at the recent tax summit, Premier Baird suggested the spike would help fund the public health system, as well as stopping the federal-state financial system from “tumbling over a fiscal cliff”.

Since its introduction 15 years ago, the GST rate has remained untouched. But Baird claimed a rise is now the only viable way to overcome the federal and state struggle to fund health services and provide the required revenue stream of $20 billion before 2020.

He suggested income tax concessions and a new welfare strategy could help lessen the blow to low-income families and the vulnerable. The expectation is that a revised GST package could be created so that households earning up to $100,000 are not put at a disadvantage. Meanwhile, the proposed rise is not set to impact fresh food, health, childcare or education.

While these GST reforms were still very much in the pipeline at the time of the summit, leaders in attendance including various premiers, chief ministers and PM Tony Abbott reached an “in-principle agreement to lower the threshold below which GST is charged on online purchases from overseas from the current $1000”, according to The Sydney Morning Herald.

Whether or not these changes will be accepted and implemented still remains to be seen. However, as a tax student or junior tax professional, it is important to understand the short-term and long-term implications of the potential rise for your clients. Tax is a dynamic and ever-evolving profession. Equipping yourself with up-to-date specialist tax information, training tools and resources early in this reform process is essential to ensure you are prepared to provide timely, practical and relevant advice to your clients.

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