Belt tightening to hit ICT businesses
Wednesday, 14 May 2008
Mike Preston
Businesses in the telemarketing and software sectors will take hits to their bottom line under separate Government revenue raising measures contained in the budget.
The biggest hit could potentially be to software vendors, with new changes to reduce the cost-effectiveness of tax arrangements associated with software depreciation.
Rules will take effect from tonight that will require businesses to depreciate software over four years, up from the current 2.5 year period. The measure will deliver a significant $1.3 billion over four year saving to Government but will provide a disincentive for businesses to delay new software purchasing decisions.
New changes to extend the Fringe Benefit Tax to for work related items could also hit ICT vendors, with laptops and personal digital devices like BlackBerrys set to lose their FBT exemption.
And just over $4 million over four years will be ripped out of Australian telemarketing operators to fully fund the operations of the Government’s new Do Not Call Register.
The new levy means the Do No Call Register will now impose a double burden on telemarketing businesses, given that many already face significant new costs in complying with rules associated with the register.
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On the plus side of the ledger, the Government confirmed it’s commitment to spend $4.7 billion on a new fibre-to-the-node network and to extend the national broadband guarantee.