GIC And Penalty

Q&A Tax

Question :

Joseph’s quarterly BAS is lodged late with $15 000 owing. It was due to be lodged on 28 February 2019 (the day that tax is due). It is not lodged, and the tax is not paid until 17 March 2019. GIC is due for 17 days (28 February to 17 March 2019) at the daily GIC compounding rate of 0.02454794 per cent. 

Added to the GIC is a penalty for failing to lodge on time, which is imposed for each 28-day period (or part thereof) that a statement is overdue. Assume that Joseph is an SBE. How much is his penalty, and what is the GIC charge?


Answer :

For an SBE, the penalty for late submission of documents (in this case the October–December BAS) is one penalty unit ($210) for every 28 days or part thereof. Joseph is 17 days late (28 February–17 March 2019), which is less than 28 days and consequently, it would only be one penalty unit. The GIC is due for 17 days at the daily GIC compounding rate of 0.02454794 per cent levied on the overdue tax amount of $15,000. The amount of Joseph’s total debt is made up of the outstanding tax and the GIC: 

$15 000 × (1.0002454794) ^17 = $15,062.72 

The GIC is $62.72.  

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