SME’s get credit from ATO

Businesses with a tax debt and that also have a payment plan with the tax office will have the interest "remitted" over the 2010 financial year.

As at April 2009, the ATO had almost 200,000 debt cases under arrangement, worth over $2.5 billion. There are around 706,000 micro businesses with a turnover under $2 million that have a tax debt. In total these businesses owe the ATO $6.5 billion.

Business tax debts appear to be rising. Maryanne Mrakovcic, general manager of the tax analysis division of Treasury, told a Senate estimates hearing last week that "we are seeing growth to date of about 7.9 per cent" in activity statement debt.

Credit advanced by private sector lenders for business purposes increased by 3.5 per cent in the year to April 2009, financial aggregates published by the Reserve Bank of Australia show, with an actual decline in the level of business credit from the private sector over each of the last three months.

Source: The Sheet