ATO Commissioner admits error regarding credit card payment ban

Australian Taxation Office (ATO) Commissioner Rob Heferen has admitted to the Senate economics committee that he “jumped to the conclusion” regarding why small businesses utilize credit card payments for tax obligations.

The controversy stemmed from the ATO’s decision to stop accepting credit card payments, a move intended to prevent the agency from absorbing significant processing fees following a surcharge ban. However, the decision sparked backlash from small business owners who argued that the ability to use credit cards provided essential “breathing space” for cash flow management, regardless of a business's financial stability.

Heferen conceded that earlier consultation with stakeholders could have identified alternative solutions. While the ATO initially estimated that only 5% of small businesses used this method—representing approximately 256,000 users—the lack of engagement led to significant concerns over cash-flow disruptions. Following the outcry, the government intervened to fund a reprieve, delaying the implementation of the ban until June 30, 2027.