Tax loophole a godsend for resellers

Software resellers will be moving into overdrive if the Federal Government's special treatment for Y2K fixes has the desired effect.

Resellers surveyed by ARN last week indicated that the reference to the millennium problem in Treasurer Peter Costello's budget speech will jolt businesses into action, "especially at the big end of town", as one business software specialist put it.

According to Richard Jones, general manager of Focus Software, some organisations will need to invest in completely new packages where there is no Y2K upgrade to existing systems. He said there had already been a noticeable increase in sales enquiries for Focus' CBA 2000 accounting package.

Integrand Solutions' managing director, David Hayman, said the Government stood to collect a significant amount of revenue on sales tax coming from upgrading hardware.

Costello said in his budget speech: "The Government considers that expenses incurred in detecting and remedying software problems asso- ciated with the millennium bug should, in general, be immediately deductible for taxation purposes."