Many computer wholesalers and resellers appear to be in denial as the clock ticks down to the September 1 sales tax exemption deadline. The Australian Tax Office estimated 5000 wholesalers would approach it for accreditation under the new system designed to crack down on sales tax fraud. However, up to mid-August, only 1000 have applied for and received the accreditation needed to buy computer goods ex-tax.
"We've been surprised by what we regard as a lower take-up rate for accreditation than we expected," said ATO assistant commissioner Mike Cebalo.
"It seems people still believe this isn't going to happen. When the new system starts and people find they truly are being denied access to tax-free goods, that will have an impact."
But there are some channel players, like PC manufacturer Optima Computer Technology, which have recognised the disaster that will accompany non-compliance with the tough new laws. Subsequently, dealers have been barraged with all manner of publicity and education campaigns.
Optima company secretary Edmund Chan said its next mailout to dealers will ask them to send in their accreditation numbers. "We've modified our internal software to put these numbers into our customer master files and we won't be selling tax-exempt without them." Cebalo noted that accreditation is not compulsory and many companies may simply have decided to pay tax at the time of purchase rather than go through the accreditation process.
"Our expectation is that some people who have made that decision may reconsider when the implications of paying tax up front become apparent to them in practice."
Of applicants to date, about one in 10 are being rejected, Cebalo said. To qualify for accreditation, organisations must display a clean bill of health in all tax compliance areas for the past three years.
"Some people are failing on that basis," he said. "If you haven't done the right thing under PAYE, you aren't necessarily precluded but it is a factor we take into account."
Another group being turned away are applicants who can't meet the tighter tests for qualifying for exemptions from paying sales tax on goods.
Registration forms for exemption certificates can be downloaded from the ATO's Web site (www.ato.gov.au) which also holds explanatory material on the new sales tax system.