114452467 - konskie, poland - september 06, 2018: australian government - australian taxation office logo displayed on a modern smartphone

New tax rules for government tender bids

Jun 14, 2019
  • Article by Gwendolen Swain

Companies are now required to prove they have a clean tax record when tendering for major government contracts.

The new tax rule is definitely an improvement, but further steps still need to be taken to protect and assist small businesses that are subcontracted into these projects, says Kate Carnell from the Australian Small Business and Family Enterprise Ombudsman.

Starting 1 July, businesses that are tendering for Commonwealth contracts over $4 million will need to provide a statement from the ATO to prove their tax record meets its standards. “This is an important step to ensure businesses tendering for government projects are up-to-date with tax payments,” says Carnell.

“It provides small businesses, particularly subcontractors who work further down the supply chain, with some security, but certainly more can be done in the procurement space.

“Small businesses rely on contracts being awarded to businesses that operate in a fair and sustainable manner.

“The government should also require that tenderers use contracts with subcontractors that comply with unfair contract terms legislation and that all subcontractors are paid on time.

“If businesses do not comply, they should be banned from future tendering for a period of time.

“I will continue to argue the case for a level playing field and the need to give small business a fair go in the procurement process.”

Image: 123RF’s Piotr Swat © 123RF.com

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