The Future of the Tax System – What we learnt at Xerocon

The future of the tax system is changing, and as small business owners we need to be aware of how these changes will affect us in the future.

In September 2022, our team attended Xerocon, an annual accounting event (this year held in Sydney) hosted by accounting software leaders, Xero. In the line-up of interesting and motivating guest speakers was the Commissioner of Taxation, Chris Jordan.

Chris discussed the importance of working together, the future of the Australian Taxation Office (ATO) and how we as accountants and bookkeepers can help solve problems and deliver benefits through digitisation.

Read on to see some of our key takeaways from Chris’ discussion about the future of the tax system.

Impactful announcements for accountants and business owners

With an audience of over 3,000 people, Chris shared some huge changes which will be affecting accountants and small business owners in the future. These included:

• The ATO will be fully digitised by 2030. They are working to deliver an improved digital platform.

• Accountants will play a crucial role in this digitisation.

• The ATO is working towards real time reporting and real time payments.

This means income tax will be paid for based on taxable profits earned in the current quarter, and not based on previous income tax returns lodged.

GST will be paid and refunded based in real time, on cash or accrual basis, depending the business’ GST status.

This will eliminate the requirement for a Business Activity Statement (BAS) to be prepared and lodged with the ATO, each month, quarter or year.

While the logistics of this were not shared by the Commissioner, this will bring a huge change to our industry.

Changing the role of accountants and bookkeepers

With the future of the tax system changing, the role of accountants and bookkeepers will soon become very different.

The ability to adapt is more important than ever. These changes will highlight the need for having up to date, accurate accounting software as real time reporting will require real time accounting.

Some additional changes will include:

• eInvoicing: it’s coming and it’s here to stay. With the ATO’s goal of real time reporting and payments, the implementation of eInvoicing is evident.

• The ATO will focus on collaboration with partners to build connected and trusted ecosystems. This will evolve the digital ecosystem.

How are we adapting to the future of the tax system?

Our team has already begun responding to this, by discussing exactly how this will impact us and our clients. We are beginning to draft strategies on the transition to ensure our clients will not be navigating the changes alone.

We always aim to provide tailored informed advice to our clients and always want to remain on the front foot.

If you’re worried about how these changes may affect your business, please don’t hesitate to speak to our team.