Government extends credit card surcharge grace period to mid-2027

Summarised from 2 outlets · Updated 11 Oct, 23:54 · Archive

Australia's government will cover credit card surcharge costs for small businesses paying tax until mid-2027, extending the transition period from two months.

The Australian Taxation Office originally planned to stop accepting credit card payments for tax bills from December following a Reserve Bank-led ban on card surcharges. After backlash from small businesses over the tight timeline, the federal government announced it would cover the cost for the tax office to continue accepting credit card payments until mid-2027, extending the transition period from two months to almost a year.

Assistant Treasurer Daniel Mulino defended the decision, telling ABC Radio that the government heard 'loud and clear that small businesses found it to be an insufficient transition period'. He said exact costs to taxpayers would not be announced until the mid-year budget update in December, as they depend partly on ongoing negotiations between the ATO and credit card companies. ATO commissioner Rob Heferen previously stated merchant fees were expected to cost the tax office almost $200 million annually, which it could not absorb.

Labor frontbencher Kristy McBain called for the Reserve Bank to go further by preventing banks from charging small businesses for point-of-sale fees, arguing that banks make billions in annual profits while small businesses already pay various other fees. Shadow treasurer Tim Wilson said the government's reversal demonstrated it did not understand how small businesses operate.

How it is being reported

• 'Loud and clear': Tax surcharge about-face defendedThe government has defended its position on changes to card surcharge payments, but the coalition says it's clear its counterparts don't understand business.The West Australian · 11 Oct, 23:33
• 'Loud and clear': tax surcharge about-face defendedThe government has defended its position on changes to card surcharge payments, but the coalition says it's clear its counterparts don't understand business.Perth Now · 11 Oct, 23:32

In this story: Australian Taxation Office · Reserve Bank · Daniel Mulino · Rob Heferen · Kristy McBain · Tim Wilson · Australia

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