Starting April 1, 2025, the Australian Taxation Office (ATO) will require about 3,500 small businesses with a history of tax issues - like late payments or incorrect reporting - to switch from quarterly to monthly Goods and Services Tax (GST) reporting.

ATO Deputy Commissioner Will Day emphasized the importance of staying on top of tax obligations, noting that monthly GST reporting can reduce the risk of falling behind.

However, this shift comes at a challenging time for many small businesses already dealing with rising costs and administrative burdens. The move to monthly reporting could increase these pressures, requiring more time and resources to manage the frequent filings.

The ATO acknowledges that while some businesses have voluntarily adopted monthly reporting to improve cash flow and streamline processes, the mandatory nature of this change may not be as beneficial for all. Affected businesses will be notified in writing and will remain on the monthly reporting cycle for at least 12 months.

Small business advocates express concern that this measure could disproportionately impact enterprises already struggling to stay afloat. They argue that, instead of imposing additional reporting requirements, the ATO should consider more supportive measures to assist businesses in meeting their obligations without adding to their administrative load.

As the implementation date approaches, small business owners are encouraged to consult with their tax professionals to prepare for the transition and address potential challenges associated with the new reporting requirements.

ATO Deputy Commissioner Will Day said when GST is reported monthly rather than quarterly it reduces the risk of falling behind.

"We recognise most small businesses try to do the right thing. Our goal is to help small business owners get their tax and super obligations right by providing transparency on the areas we are focused on," Day said.

"The ATO has a responsibility to level the playing field, as small business owners rightfully expect us to ensure fair competition and compliance."

"If you’re a small business who continues to deliberately disregard your obligations, you can expect the ATO to move you to more frequent GST reporting," he said.

The ATO said the ‘Getting it right’ campaign, will also focus on contractors in the building and construction, cleaning, courier and road freight, information technology (IT), or security, investigation or surveillance industries, omitting income.