Australia Pushes eInvoicing To Boost SMB Compliance

The Australian Taxation Office (ATO) says killing off the paper invoice is critical to promoting corporate compliance and business growth as the nation readies to end its use of physical invoices.

Reports in the Sydney Morning Herald on Wednesday (Aug. 28) said the ATO is championing the end of the paper invoice, saying electronic invoices and other government initiatives to digitize business processes, such as single-touch payroll, can help address the ballooning small business tax gap.

Australia is approaching a public consultation to pass legislation that would confirm a framework for eInvoicing in the nation, while Australia and New Zealand governments have also been collaborating on an eInvoicing standardization project for invoices sent between the two nations.

The national eInvoicing initiative is part of Australia’s move to adopt the Pan European Public Procurement Online framework, which sees governments adopting an eInvoicing framework for public procurement. Under its own framework, dubbed PEPPOL, Australia will aim to pay its small business government suppliers within five days if they sign up to receive electronic invoices.

“Australian government agencies will be using the PEPPOL framework for eInvoicing,” said Minister for Housing and Assistant Treasurer Michael Sukkar, according to reports. “Agencies will commence implementation of PEPPOL compatible eInvoicing once the global requirements are finalized and the Australian PEPPOL Authority is established.”

The Australian Taxation Office’s support of the eInvoicing initiative follows its announcement that small businesses in the country  have left an $11.1 billion gap in tax payments, with cash-only businesses leading the tax-dodging behavior.

But while regulators said eInvoicing will promote faster payments to small businesses as well as compliance, eInvoicing service providers say many small businesses lack awareness of how to send and receive eInvoices, or that it’s even an option at all.

“Most business owners are slow to change from what they currently do,” said Link4 Chief Executive Robin Sands, reports said.