Australian SME tax delay a model worth considering
Ireland should follow Australia in instituting a tax-delay scheme for businesses struggling to pay their tax debts, international SME expert Tony Markwell has said.
Mr Markwell, who is in Dublin to speak at an international conference on the challenges facing Small and Medium Enterprises (SMEs), insisted that the Australian tax delay model was helping SMEs survive the recession.
Mr Markwell, an Australian partner with Grant Thornton, said: "The Australian government (has) realised that SMEs are struggling to obtain payment for the work that they've carried out. By allowing SMEs a year's grace on their tax bill, you are giving businesses a chance to call in their debts.
"Since the global financial crisis hit, SMEs have seen the length of time it takes to receive payment for invoices skyrocket -- I understand this is happening in Ireland, too,'' he said.
"Another idea that's working for Australian SMEs is granting full tax write-offs for expenditure on new equipment for start-up companies in their first year. In addition to making businesses more efficient, this has generated huge spin-off economic activity."
The Grant Thornton event brought together over 80 partners from 28 different countries to discuss the 'New Normal' of increased regulation, low access to credit and the growth of Brazil, Russian, India and China, otherwise known as the BRIC economies.
Pat Burke, partner at Grant Thornton Ireland, said: "This event gave SME experts from across the world a chance to find out which business issues were localised to their own market, and which issues were international.
"All countries are beginning to accept that for years to come, businesses will have to get used to operating with increased regulatory burden and decreased access to credit.
"The businesses that can adapt to these conditions quickly and develop systems to deal with increased regulation are the companies that will prosper in the coming years," he said.