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This Budget has seen Government fail to address SME's basic wish list for tax to be certain, simplified and compliance to be reduced yet again. SMEs continue to be distracted by paperwork rather than being in a position to grow their business for the benefit of the Australian economy, according to leading advisory firm Grant Thornton.
"The budget failed to deliver key reforms and initiatives for SMEs - Division 7A reform, Trust Taxation Reform, abandoning the requirement to pay income tax on a monthly basis and re-introduction of the capital investment allowance," said Robert Scheiber, privately-held business Partner at Grant Thornton.
"What we did see in the budget is again the tinkering of Division 7A with its probable expansion to tax consolidated groups without the benefit of having the Board of Taxation's response to the first ever review of this Division."
"Confirming the pre-Budget speculation that interest deductions would be reduced for foreign-owned Australian operated businesses, a surprising - yet welcome - announcement was the increase in the de minimus threshold that keeps SMEs out of these complex rules."
"Foreign-owned SMEs will, from 1 July 2014, be eligible to claim $2 million or less in interest deductions, up from $250,000, without having to comply with much tighter debt-equity ratios."
"Notwithstanding the Government's key commitment to strengthening ties with the Asia Pacific region it has only allocated $7.8 million over five years in grants for Australian business organisations to improve links with Asia to broaden their reach into emerging business centres."
"One initiative that may benefit SME's is the expansion of business assistance and better access to finance through the $378 million Venture Australia package to stimulate Australia's venture capital market. The Venture Australia initiative will provide high risk capital (venture capital) to Australian businesses to help them innovate, grow and become globally competitive."
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To speak with Mr Scheiber for further information please contact:
Helina Lilley
National Public Relations Manager
T +61 2 8297 2421
M 0437 725 520
E helina.lilley@au.gt.com
About Grant Thornton Australia Limited
Grant Thornton Australia provides audit, tax and advisory services to dynamic, growing organisations and is a single national firm, with over 150 Partners, more than 1,200 people across Australia and national turnover of AUD $232 million. Grant Thornton International is the fastest growing international accounting network in the world, with a global turnover of US$3.7billion and more than 30,000 people, and was recently named 2013 Network of the Year by the International Accounting Bulletin.