The Australian government has delayed a planned ban on credit card payments to the Australian Taxation Office (ATO) until June 30, 2024, following strong pushback from businesses. Treasurer Jim Chalmers announced the decision, stating that the government would temporarily cover the cost of surcharges to allow more time for consultation and a smoother transition.
The ATO had initially planned to stop accepting credit card payments from December 2023, a move prompted by the Reserve Bank of Australia's ban on credit card surcharges. The ATO argued that absorbing the fees would cost taxpayers around $200 million annually, noting that only 5% of small businesses used credit cards for tax payments. However, the decision sparked widespread criticism from small business owners and some government ministers.
Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry (ACCI), welcomed the extension, calling it a 'much needed breathing space' for small businesses. He emphasized the need for genuine consultation to find a long-term solution. Housing Minister Clare O'Neil also expressed concerns, urging the ATO to reconsider and engage more constructively with businesses.
Independent MP Kate Chaney highlighted the challenges for businesses managing cash flow, particularly with short notice. Treasurer Chalmers confirmed that the costs of the extension would be finalized in the mid-year budget update due in December.