The Australian Taxation Office has launched temporary repayment plans for businesses struggling with surging fuel costs, and will limit compliance actions in the hardest-hit industries, as it adjusts to what could be the most significant economic shock since the COVID-19 pandemic.
As conflict in the Middle East rocks the global energy market, the tax office on Wednesday announced its new fuel response payment plan, a streamlined option for Australian businesses falling behind on their tax obligations due to fuel prices.
Through that plan, eligible taxpayers can lock in three-year payment commitments, with equal monthly instalments and no upfront payment.
The ATO will also decide whether to remit the General Interest Charge attached to those late payments, if the business taxpayer pays those monthly instalments on time and brings other outstanding lodgments up to date.
Eligible business taxpayers must meet four criteria. They must:
Smarter business news. Straight to your inbox.
For startup founders, small businesses and leaders. Build sharper instincts and better strategy by learning from Australia’s smartest business minds. Sign up for free.
By continuing, you agree to our Terms & Conditions and Privacy Policy.
Demonstrate increased business operating costs, either directly through increased fuel prices, or indirectly through growing logistics and supply chain costs,
Have a new or existing tax debt they cannot service,
Demonstrate they could have feasibly paid those obligations if fuel prices hadn’t risen,
Ensure their lodgments are up to date within three months of the payment plan’s commencement.
Businesses and sole traders can apply for the fuel response payment plan until June 30, either directly through their the ATO’s online services for business, or through a tax agent.
Related Article Block Placeholder
Article ID: 332819
“We recognise the fuel situation may severely affect some businesses, disrupting business supplies and day-to-day operations and creating uncertainty and financial pressures,” said ATO Commissioner of Taxation Rob Heferen in statement published Wednesday.
“If high fuel costs are affecting your business’ ability to meet tax payment obligations, and you are having difficulty getting working capital financing from your bank or normal source of credit, please let us know, so we can support you through this period,” he added.
The ATO cannot waive debts, but “if you can’t pay in full at this time due to high fuel costs, it’s important to pay what you can and arrange a payment plan with us as early as possible,” said Heferen.
Further leniency on the way
The federal government says the ATO will further support business taxpayers by showing leniency to businesses in particularly vulnerable industries.
In a joint statement, Treasurer Jim Chalmers, Small Business Minister Anne Aly, and Assistant Treasurer Daniel Mulino on Wednesday confirmed “some [ATO] compliance actions will also be limited across the worst affected industries and some debt collection actions may be paused where appropriate.”
These measures are “common‑sense steps that recognise and respond to the extraordinary circumstances we find ourselves in,” read the statement.
The ATO has applied increasingly stern compliance measures since the end of COVID-19 public health restrictions, in order to whittle down billions of dollars in unpaid small business debts.
Altering that course with the new fuel response payment plan, and a gentler touch for sectors ravaged by diesel and petrol inflation, shows the severity of the current fuel crunch.
Further updates on Australia’s response to the fuel crisis are yet to come.
Prime Minister Anthony Albanese is scheduled to address the nation on the conflict between the US, Iran, and Israel at 7pm AEDT Wednesday night, in another throwback to the extraordinary media events of the COVID-19 crisis.
