Ralph's ‘Simplified Tax System’ : A Small Business Perspective

In 1996 the Commonwealth Government embarked on a campaign to helping Australia's 860,000 small businesses from the constraints of crippling taxes and red tape with the establishment of the Small Business Deregulation Taskforce. Notwithstanding the efforts of the taskforce the income tax laws have expanded from some 3,000 odd pages of legislation in 1996 to over 8,000 pages in 2002. Thus it is not surprising that the Government moved to simplify the tax system for small business with the massive tax reforms flowing from the 1999 Ralph Report. Consequently the new Simplified Tax System [STS] for small business was introduced on 1 July 2001. This paper firstly examines the Government's rationale for introducing the STS. Secondly, the paper reviews the state of play prior to the STS. Finally the paper seeks to critically review the legislation and find whether the reform will make the tax system any simpler for small business