New medical devices tax wipes out tax cut benefit

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New medical devices tax

Proposals from the Australian Government to impose new cost imposts on suppliers of low-risk medical devices will eliminate the entire benefit of its tax cuts for many small businesses in Australia’s dental industry, the Australian Dental Industry Association (ADIA) has stated.

“ADIA has been a strong supporter of the Australian Government’s commitment to reduce tax rates for small business,” ADIA CEO Troy Williams said.

“It is therefore profoundly disappointing to know that for many of these small businesses in the dental industry, the benefit of the small business tax cuts will be entirely eliminated by the new medical devices tax.”

The concerns of the dental industry surround a proposal of the Therapeutic Goods Administration (TGA) to impose on businesses a new impost to place low-risk medical devices on the Australian Register of Therapeutic Goods (ARTG). For the first time, businesses will have to pay $530 for each new ARTG low-risk medical device entry.

“This may not seem like a large amount, but for many small businesses in Australia’s dental industry it’s a huge cost,” Williams said.

“These businesses just want to do the right thing. They want to invest in their business. They want to pay their staff more-just like the Treasurer wants them to. However, the proposed medical devices tax just makes this harder.”

The proposed new tax on low-risk medical devices will apply to products such as speciality surgical instruments. It is estimated that for small businesses the cost will be between $4,240 and $13,250 per year, a large sum for the 80 per cent of businesses in Australia’s dental industry with turnover less than $10 million per year.

“For many of these businesses the gains from the small business tax cut will be entirely wiped out,” Williams said.

“That’s why ADIA is calling for the proposed introduction date of 1 July 2018 be delayed, allowing for the new tax to be subjected to formal review to assess its impact on small business.”

Based on a media release sourced from the ADIA website.

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