March 28 was the due date for GST returns and payments, while April 7 is the upcoming deadline for provisional tax payments for businesses that have a March balance date.
Chartered Accountants Australia and New Zealand tax leader John Cuthbertson said that due to the economic disruption caused by COVID-19, many companies will have exhausted the cash buffers they were saving for tax payments. Moreover, many businesses are also struggling with costs associated with layoffs and employees working from home.
Inland Revenue has officially stated that companies who cannot pay their taxes on time due to the impacts of COVID-19 do not need to contact the department. “Get in touch with us when you can, and we’ll write-off any penalties and interest,” says the IRD website.
Cuthbertson said that businesses will need some time to determine the best way to incorporate newly available loans and subsidies. He added that there are several possible ways to accomplish this.
Tax specialist Terry Baucher concurred that action is required. “The provisional tax payment on May 7 is also when the GST for March 31 is due for many businesses so again that will be a stress point for businesses,” he said.
While the IRD is striking a softened tone with regard to payments during the ongoing pandemic, Deloitte partner Allan Bullot said that business leaders should not think that they are exempt from paying their taxes. Companies should still calculate their taxes as they will have to pay them at some point.