While some confusion still remains over how systems will be implemented, reaction to the Federal Government's recently passed sales tax reforms has generally been positive. Most resellers ARN spoke to are looking forward to unprecedented industry stability, despite extra adminstrative work.
Wayne Dacey, management accountant from Victorian distributor Prion, said: "We have already sent letters to all our customers alerting them that these new systems are coming. There will be a little bit of legwork involved with getting accreditation applications into the ATO, but we'll live with that if the legislation has the desired effect."
Ross Cochrane, national sales manager at Express Data in Sydney, recognises that he will have to put systems and practices in place.
"The main thing we need to ensure is that these systems don't impose any burdens on customers legitimately trying to go about their business."
Ron Harris, managing director at Harris Technology, said: "This legislation will enable genuine businesses to be more stable and able to compete on a level playing field."
Jack Zhong, managing director of Australia-wide and Asian reseller TodayTech, is also pleased with fair competition: "I think the new tax laws will increase our sales because the dodgy suppliers will be out of the market. The workload increase is worthwhile because of the parallel sales increase."
Key features of the sales tax legislation are:
People wishing to buy goods tax free for resale will have to apply to the Australian Tax Office (ATO) for accreditation. Applicants will need to supply evidence of past sales tax law compliance.
Quotes on tax-exempt orders of Part 7A goods will need to be authorised by the ATO. Resellers will have to have a mechanism in place to authorise tax-exempt orders.
An accredited person buying from an unaccredited source on a tax-inclusive basis will be required to withhold the sales tax component of the selling price for forwarding to the ATO. Dodgers will no longer be able to use sales tax withheld from the ATO as profit margin.
The Commissioner has the authority to retrospectively disallow claims from October 24, 1997, for credits if the credit provisions are being exploited. The onus will be on the claimant to have the correct documentation and proof that the products are eligible for tax-free purchase.