The Institute of Public Accountants (IPA) has urged the Government to reintroduce the loss carry-back initiative that allows companies to clawback their tax paid when they incur revenue loss.
The initiative was introduced in 2012 but was removed a year later, and IPA chief executive, Andrew Conway, said with the repeal of the Minerals Resource Rent Tax, the loss carry-back became an instant casualty.
Conway said the initiative gave viable businesses a boost when they needed it the most through more timely tax loss relief.
“Small businesses operating through companies generally have limited resources to cope with adverse trading conditions and may require short-term liquidity to meet day-to-day liabilities,” he said.
“The provisions that were introduced struck the right balance between allowing losses and limiting exposure to government revenues by placing a quantitative cap in conjunction with a two-year carry-back period.”
