The Budget did not contain major changes to indirect taxes but announced a small change to the luxury car tax for farmers and tourism operators. The Budget also proposed measures to counter the black economy through more stringent (annual) ABN eligibility rules.
ABN integrity measures
The Government has announced that from 1 July 2021, ABN holders with an income tax return obligation will need to lodge their income tax return to retain their ABN. From 1 July 2022, ABN holders will also need to confirm the accuracy of their details on the ABR register on an annual basis.
These changes will enact some of the measures recommended by the Black Economy Taskforce, which identified widespread abuse of ABNs. The devil will be in the detail as to how this measure will apply. The deferred lodgement due dates that apply to certain taxpayers are likely to make the practical implementation of this measure challenging.
The change will also impose an additional compliance burden on businesses to ensure the currency of the ABN of their suppliers. Where a supplier’s ABN is cancelled, a payer could unwittingly find themselves with a no-ABN withholding obligation. The Government must ensure that innocent taxpayers are protected from unexpected consequences.
Increased luxury car tax refunds
Farmers and tourism operators who use luxury vehicles in their business are currently able to access refunds of up to $3,000 of the luxury car tax (LCT) paid. From 1 July 2019, the LCT refund limit will be increased to $10,000.