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Should you sweat the GST hike?
Wednesday, 17th February 2010 - Originally published by NBR (Chris Keall)Disappointingly for fans of millennium bug-level tech hysteria, experts are playing down fears that the coming sales tax increase will lead to bugs, or cost blow-outs - at least in most cases.
Accounting software makers and independent experts polled by Keallhauled were unfazed about the looming rise in GST to 15%, painting scare articles as overblown.
Civilisation did not end in UK
Independent analyst and consultant Ben Kepes, of Diversity Limited was in the UK last year when a similar VAT change went through.
Makers of accounting programmes that run over the internet were,
“hand waving and saying ‘this is why cloud computing is the dogs bollocks’.” said Mr Kepes.
“But at the end of the day the problems were few and far between.” for both online programmes, and more traditional shrinkwrapped.
“Largely speaking, ‘standard’ software is fine. And the numbers using super proprietary solutions are very low. Of that low number, the majority built their stuff because of a specific need and hence have access to people who can make the necessary changes,” said Mr Kepes.
Software makers breezy
The analyst compared 'beat up' stories in the lead up to the UK sales tax increase to the over-hyped lead-up to the Y2K bug.
“It’s all good for us. We'll seamless change things with minimal effort for our customers, similar to UK VAT changes last year,” said Xero boss Rod Drury, whose company also operates in the Great Britain and Australia and has 12,000 customers worldwide.
“It’s a big benefit of online software.”
Julian Smith who heads the largest account software company operating in New Zealand, MYOB, said the change would not be an issue for his 170,000 customers, at least in technical terms.
The 150,000 customers with shrinkwrapped copies of MYOB will be able to make a settings change that will take “just seconds,” according to Mr Smith.
Another 20,000 or so using the online or software-as-a-service version of MYOB would have settings changes automatically updated.
MYOB and Xero both pledged to Keallhauled that no costs associated with tweaking their systems for the GST rise would be passed on to their customers.
Most software OK
Both Mr Drury and Mr Smith pooh-poohed comments from NZ Computer Society chief executive Paul Matthews, who said companies faced costs and confusion after the anticipated April 1 changeover, with some live invoices at the old GST rate, and some at the new.
Both Xero and MYOB can be set so only future invoices are set at 15% from the start of the new tax year. Many users operating in more than one country already issue invoices with multiple GST rates.
Diversity's Mr Kepes told NBR that Mr Matthews was correct that some businesses faced increased software costs, to the extent that
“those using custom code or specific spreadsheets will have some updating to do. But most people work in GST exclusive values anyway.”
Skipped upgrades? You may have a problem
“Being an IT services company we do not perceive any issues internally, we use SAP Business One and it easily deals with multiple GST variants as we utilise it in both our Australian and New Zealand entities with different GST regimes,” DataSouth managing director Gavin Bennett told NBR.
“In terms of our mainstream Datasouth clients most of our clients will be using similar packages and variations to GST will normally be covered with support maintenance and upgrade contracts.”
“The issue is at that segment of the market that is using older legacy software that is no longer supported or unwisely have elected not to maintain maintenance agreements and effectively have missed two or three iterations of upgrades and get back on track they may need to effectively buy the latest version at full cost.”
Datasouth specialises in the provision of technology solutions that assists organisations in enhancing their business by improved information flow and productivity. As an organisation that has been providing advice to government and corporate clients for over fifteen years, we can advise, design and implement solutions that truly provide a competitive edge and reduced cost structures.
To better understand how we may help you to drive your business forward, please contact Datasouth to discuss your specific requirements.
