Australian Treasurer Jim Chalmers has delayed the Australian Tax Office's controversial ban on credit card payments from its November start date. This was reported by Qazaqyia.kz citing The Guardian.
Chalmers announced extra funding on Friday, after days of criticism and calls from small business to halt the ban.
The tax office will continue to accept credit card payments via third parties as well as other free and low-fee payment methods like debit card and bank transfers from July 2027.
The decision followed criticism of the ATO's response to the Reserve Bank's moves to ban credit card surcharges, something the federal government sought to take credit for.
The tax commissioner, Rob Heferen, announced moves in early October to stop accepting credit card payments for tax bills from 1 December. He said continuing to accept card payments would cost the ATO almost $200m a year, as those costs can no longer be passed on to card users.
But some business owners, particularly smaller operators, use credit card payments as a cashflow tool, managing their liabilities by using credit when required. Estimates suggest about 5% of small businesses use credit card payments for tax bills.
Because tax liabilities are legislated by federal parliament, the ATO said it could not build card payment costs into charges paid by taxpayers.
Government ministers had sought to pressure the ATO into changing its position this week, amid strong criticism from the Coalition and business lobby groups. The ATO is an independent authority and the government cannot direct the tax commissioner's decisions.
"We've stepped in to ensure that the tax office can take credit card payments until the end of June next year," Chalmers said on Friday. "This will give them the time to consult more with small business and to get it right, this recognises the really important contribution that small businesses make to our local communities and to our economy more broadly.
"Now we try not to interfere with the RBA or the ATO when they go about designing and implementing this surcharge ban, but it's really important that we have stepped in today to make it possible for the ATO to continue to take credit card payments until the end of the financial year."
Australian Chamber of Commerce and Industry boss, Andrew McKellar, said the delay provides "much needed breathing space for small business".
"It is reassuring to see some sense prevail on the credit card ban for now," he said.
"This is a win for small business and a welcome reprieve, but small businesses remain under significant pressure."