3rd August 2020 | Business
Key Points
- The Senate inquiry has supported the bill to limit cash transactions to $10,000
- Why Ban cash purchases over $10,000?
- How does it affect your business?
The Senate inquiry has supported the bill to limit cash transactions to $10,000. This new rule means cash purchases of more than $10,000 is illegal. The Currency (Restrictions on the use of Cash) Bill 2019 will make it a criminal offence to pay cash for purchases of more than $10,000, with penalties of up to two years in prison and as much as $12,600 in fines.
The draft laws received support from a federal Senate inquiry earlier this year after passing through the House of Representatives in 2019. The federal government has yet to announce when the new rules will become law but have indicated that it will consult with businesses to give people enough time to adjust.
Why do this?
The draft laws were recommended by the treasury’s black economy taskforce to stamp out tax avoidance, money laundering, and other black economy activities. Industries, where cash payments are frequent, can often lead to vendors not declaring their income and avoiding tax. This means they are effectively running their business at a lower cost than their rivals and creating uneven competition. “Based on the evidence provided, the committee agrees that non-cash payment methods create clearer records; are usually more convenient for consumers and businesses; and increasingly involve lower costs, as they simplify record-keeping and avoid the security, insurance, and other costs associated with handling and holding cash,” the Senate committee said.
Does it affect your business?
Businesses of all sizes will be impacted when these draft rules become law; however, the government has ruled out applying the laws retrospectively. Companies that receive cash payments of more than $10,000 should start adapting their processes to be ready when these rules are passed in the Senate and take effect. If you regularly accept cash payments of more than $10,000 and have questions about how this may impact your business, please speak to one of our business advisor at Ax3 today. This is an excellent time to change business processes before it happens to be ahead of the curve.
To speak to our advisor: info@Ax3.com.au