The Albanese Government has stepped in to ensure small businesses and other taxpayers have a longer transition period before the ATO phases out credit card payments.
This decision is about putting small business first.
Australian small businesses have said the ATO’s announced timeframe was inadequate and we have taken these concerns seriously and acted on them.
Labor will always back small businesses because we know how important they are to our economy.
The Government will provide transitional funding so the ATO can continue accepting credit card transactions until the end of the financial year, with costs to be finalised in MYEFO.
This will provide more time for the ATO to engage with small business and other taxpayers who currently rely on credit cards, provide more detailed information to those affected, and consult on targeted options to support impacted taxpayers.
As part of this, the Government has asked the ATO to consult on how best to support those experiencing financial hardship and identify alternative arrangements for businesses and individuals that are unable to pay via other methods.
In response to the independent RBA’s surcharging reforms, the ATO explored a range of options including engaging with credit card companies to seek lower fees. The credit card companies did not offer sufficiently low fees to enable the ATO to continue to accept credit cards. The ATO will continue to engage with card companies on this matter.
Just over two per cent of individuals and around five per cent of small businesses paid via credit card in 2024-25.
After 30 June 2027, the ATO will continue to accept credit card payments via third parties as well as other free and low‑fee payment methods like debit card and bank transfer.
We will continue to work closely with small businesses and the ATO on this issue to get the best outcome.
