FED: Some pre GST business spending tax deductible: Costello

AAP General News (Australia)
08-19-1999
FED: Some pre GST business spending tax deductible: Costello

CANBERRA, Aug 19 AAP - Small and medium sized businesses would be able to claim spending on
new plant or software for implementing the GST, Treasurer Peter Costello said today.

Mr Costello said the government would legislate to provide immediate tax deductibility for
spending by small and medium sized businesses on the shift towards a 10 per cent GST.

He said the move would cost $175 million in 2000/01, and was in addition to $500 million
set aside in 1999/2000 to assist small and medium enterprises, charities and education bodies
prepare for the introduction of the GST.

"Providing immediate tax deductibility for GST-related expenditure will be of major
assistance to small and medium sized businesses as they prepare for the introduction of the
GST," the Treasurer said in a statement.

He said that for businesses with a turnover lower than $10 million, the government would
legislate to extend the class of expenditures immediately deductible to include spending
incurred on acquiring new plant or new software (including upgrades) associated with
gearing-up for the GST, provided the expenditure is incurred before July 1, 2000.

Mr Costello said the Australian Taxation Office would issue a tax ruling to set out the tax
treatment of such expenditure incurred by business taxpayers in preparing for the GST.

This ruling would apply for businesses with turnover greater than $10 million, and would
apply to all businesses for expenditures different from those covered by this announcement, he
said.

AAP ear/kr

KEYWORD: TAX COSTELLO

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