The Australian Taxation Office is facing mounting pressure to reverse plans to stop accepting credit cards for tax payments after small businesses warned the move could remove an important source of short-term financing.
The ATO plans to end credit card payments for tax bills from December 1 following changes to Australia’s card surcharge rules.
The Reserve Bank’s new rules prevent merchants from separately passing card processing costs on to customers, creating an estimated annual cost approaching A$200 million if the tax office continued accepting credit cards under the existing system.
But small business groups argue the solution could create a much larger cash-flow problem.
Around 5% of small businesses are estimated to use credit cards to pay tax obligations, allowing them to take advantage of interest-free periods that can extend beyond 50 days.
