Resellers face taxing times GST a plus, but services could be hit

Resellers face taxing times GST a plus, but services could be hit

The abolition of the sales tax headache which has caused, and continues to cause, the channel so much pain will be the biggest benefit for resellers in the Government's proposed tax reforms.

Resellers will also benefit from an expected surge in demand caused by lower prices for computer equipment, as well as from reforms designed to help small businesses.

However, the effect that a 10 per cent slug on services will have on the channel could counter any gains. Already, research company Gartner Group has declared that the GST could promote a swing back which sees business retain IT services in-house.

Long overdue

Greg Hayes, the small business spokesperson for the Australian Society of CPAs, told ARN tax reform was long overdue, particularly in the IT industry.

The key features of the new package include a 10 per cent GST, busi- nesses paying all their taxes once a quarter on one form, changes to capital gains tax, enhanced protection for small businesses under the Trade Practices act, and lower compliance costs for fringe benefit tax.

The proposed tax system would result in the abolition or replacement of wholesale sales tax, company tax instalments, stamp duty, the reportable payments system, provisional tax, pay as you earn (PAYE) tax and the prescribed payments system.

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