Government extends credit-card tax payment support for small firms until 2027

The Australian Taxation Office intended to cease accepting credit-card tax payments after a Reserve Bank-mandated ban on card surcharges took effect in December. After small-business groups complained that the two-month transition was insufficient, the federal government stepped in to fund the ATO’s continued acceptance of credit-card payments until mid-2027, effectively extending the transition period to almost a year.

Assistant Treasurer Daniel Mulino indicated that the precise cost to taxpayers will be revealed in the mid-year budget update due in December, noting that negotiations with credit-card issuers will influence the final figure. ATO commissioner Rob Heferen had previously estimated the surcharge could have cost the agency close to $200 million annually, a burden the office could not absorb. Labor frontbencher Kristy McBain urged the Reserve Bank to further restrict banks from imposing point-of-sale fees on small firms, while opposition treasurer Tim Wilson criticized the policy shift as evidence the government does not grasp small-business operations. Treasurer Jim Chalmers defended the administration’s consultation with business owners and signaled additional tax measures on discretionary trusts are forthcoming.