The study on business tax payments

July 2020

Tax Obligations

About the study sought to understand how the current recession would impact the ability of Australian businesses to meet their tax obligations. It conducted a survey of 261 Australian businesses – 88 per cent of which are SMEs – to ascertain how businesses paid their BAS and taxes before the 2020 pandemic. The survey asked business owners whether they pay their tax obligations in cash, whether they have ever gone on a payment plan with the ATO, taken out a loan, or paid via credit card to get by, and how many times they have had to do this. surveyed businesses across a range of sizes: SMEs (1-200 employees) and large (more than 200 employees), and across each State.

How did businesses pay their GST and tax obligations last year?

The results reveal that 25 per cent of businesses overall – and 21 per cent of SMEs – were unable to pay their GST and tax in cash, in full, in 2019. Among these businesses, 64 per cent – and 83 per cent of SMEs – mostly paid it through a repayment plan with the ATO or on a credit card. Sixty-five (65) per cent went on a payment plan or paid via credit card at least twice in 2019, and 16 per cent did so every time.

Looking across the different organisation sizes, among who did not pay their full tax obligations in cash every time, a staggering 57 per cent of large organisations had to secure financing to make their payments at least once in 2019, compared with 9 per cent of SMEs.

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Payment Plans

How often did businesses go on payment plans with the ATO, pay with a credit card or take out a loan?

Among businesses that had to go on a payment plan or use credit, 65 per cent did so at least twice in 2019. Between business sizes, 83 per cent of large organisations and 70 per cent of SMEs did so. Sixteen (16) per cent of businesses paid via payment plan or credit every time. Between business sizes, 33 per cent of large organisations, 25 per cent medium businesses and 13 per cent of small businesses did so every time.

In 2019, how many times did your business go on a payment plan with the ATO, or pay its GST/tax bill via credit card or via a loan? (among businesses who didn’t pay in full each time).

Once (%)
Twice (%)
Three times (%)
Every time (%)

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Business Struggling

Why are businesses struggling with their tax and GST payments?

Three in four (77 per cent) businesses cited cash flow issues as the major reason they were required to go on payment plans with the ATO or make payments via credit. For 43 per cent of businesses overall and 29 per cent of SMEs, cash flow issues stem from long-outstanding customer or client payments. A further 21 per cent said insufficient cash flow arose because the business spent beyond its means.

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