Australian government delays ATO credit card payment ban

The Australian government has announced a delay to the Australian Taxation Office (ATO) plan to stop accepting credit card payments, pushing the deadline to June 30, 2027. This decision follows significant backlash from small business groups and political figures who argued that the original November 30 deadline would severely impact cash flow management for entrepreneurs.

The controversy stems from a recent ban on credit card surcharges introduced by the Reserve Bank of Australia, which aims to save consumers approximately $1.6 billion annually. The ATO had initially stated it could not absorb the resulting merchant fees, which were estimated to cost the agency nearly $200 million per year. The agency argued that absorbing these costs would reduce available funding for government services.

Treasurer Jim Chalmers committed to providing transitional funding to the ATO to facilitate this extension. While some government ministers expressed concerns regarding the impact on small businesses, others defended the ATO's position, noting that only about 2.3 percent of tax payments were made via credit cards in the 2024/25 financial year. The delay is intended to allow for further consultation and the development of alternative payment arrangements for those experiencing financial hardship.