Sun Sep 15 17:00:00 UTC 2024: ## Sole Traders Limiting Earnings to Avoid GST Threshold: Survey

**Wellington, New Zealand** – A new survey by accounting service provider Hnry reveals that a significant number of New Zealand sole traders are intentionally earning below the GST threshold of $60,000 per year, limiting their earning potential to avoid the added compliance burden.

The Sole Trader Pulse survey found that 36% of sole traders are choosing to earn under this threshold, despite potentially missing out on significant income. Hnry co-founder James Fuller believes this demonstrates the need for a review of the current GST settings, which haven’t been adjusted for inflation since 2009.

Fuller advocates for raising the threshold to $75,000, arguing it would boost productivity and empower sole traders to grow their businesses. However, GST specialist Allan Bullot from Deloitte believes such a change is unlikely, arguing that indexing the threshold to inflation would have already brought it up to $87,000.

He further cautions that while some support raising the threshold to $100,000, it could lead to complications and potentially encourage more businesses to operate below the threshold. Bullot also highlights the argument that everyone should be included in the GST system, citing the existing threshold as a compromise to minimize compliance costs.

Meanwhile, Revenue Minister Simon Watts confirmed receiving a petition on the issue but ultimately decided not to proceed due to potential complexities for other businesses. He emphasizes that many businesses choose to register for GST voluntarily, even when below the threshold, highlighting a need to strike a balance within the broader GST system.

The survey’s findings raise important questions about the impact of the current GST threshold on New Zealand’s business community and the need for a comprehensive review to address the challenges faced by sole traders.

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