POPULAR WORDS

The Australian Labor Party has released its plan to relieve small businesses of some of the complexities of the BAS. The "simpler BAS option - the 'ratio method'" will eliminate the need for quarterly and annual GST reconciliations, a joint statement by Opposition Leader Kim Beazley and Shadow Treasurer Simon Crean states. "The simpler BAS option effectively extends to all GST-paying small businesses (annual turnover less than $2 million) the 'simplified accounting method' currently available to mixed businesses," they say. "Under the simpler BAS option, small businesses can easily adopt a simply calculated quarterly payment on their quarterly turnover. "Each registered business using the ratio method will be given a GST ratio based on its own trading circumstances. "The GST liability is calculated simply by multiplying the business turnover by this ratio. "The method couldn't be simpler. Small businesses only have to complete one calculation and fill in two boxes on the BAS form. "It will also provide a 'safe harbour' from the potential costs arising from any tax audit for those adopting the new option. "The simpler BAS option will be individual or industry specific, based on reporting experience during the first two years of the GST, and employ a simplified ratio-to-turnover approach with allowance for large or irregular business cost items. "Labor will require that the simpler BAS option be revenue neutral, and that it generates net compliance cost savings for small business." Further details of option will be developed by the GST Review Committee, for commencement from July 1, 2002. Treasurer Peter Costello has dismissed the plan as a "proposal for further complication", which would see many businesses paying more. "The Labor Party are promising that it will be revenue neutral, which means that anyone whose actual liability is higher will take advantage of the percentage, but those whose actual liability is lower will have to pay more to keep it revenue-neutral," he claims. "This is a proposal for businesses to pay more GST."