The abandoned provisional tax system required taxpayers to make quarterly payments based on last year's earnings. It's not just a case of adding up cash receipts and payments. A decade ago the Australian Stock Exchange proposed that listed entities should report their profits on a quarterly basis. The response from big companies, which employed teams of accountants, was that this would be too costly and difficult. The ASX dropped the proposal in favour of half-yearly reporting, and later the Commonwealth embedded those requirements in the Corporations Law.
Business has yet to face the task of reconciling four BASs with annual income tax returns.
This burden could be rolled back if businesses with turnover below some reasonable threshold were permitted to file one BAS annually. They could still make quarterly instalments of their estimated net GST, or seek refunds if they wished. This would make little difference to the timing and amounts of Government revenues. But millions of taxpayers would be grateful. This reform would still not go far enough to remedy the gross inefficiency of the system of taxation for small business.