Australia's big businesses are least prepared for the introduction of the GST, a survey by Ernst & Young has revealed.
According to the report released on Thursday, 55 per cent of respondents with revenues in excess of $500 million per annum said it would be "unlikely or extremely difficult" for them to meet the July deadline for GST compliance.
Only 10 per cent of respondents said it would be "easy" to have GST systems in place. However, respondents from businesses with revenues of less than $50 million per annum are more confident.
The report revealed that 31 per cent of respondents said it will be easy to meet the deadline while 18 per cent said it would be unlikely or extremely difficult.
"Corporate Australia is still largely unprepared for the GST," Carolyn Mall, Ernst & Young's national manager of GST services said.
"Corporate IT systems are far from GST ready."
Mall said companies who fail to prepare for the GST may face "extremely costly ramifications", including maximum exposures as high as 10 per cent of their revenue for each month they do not comply in addition to Australian Tax Office penalties.
Ernst & Young warned companies with operations in countries which currently have a GST or VAT (value added tax) system not to be complacent. Due to Australia's unique system, relying on offshore experiences may only give businesses a false sense of preparedness, officials warned.
Whilst unable to estimate the cost of GST compliance projects across the country, Mall said companies can expect to be spending around 0.75 per cent of their annual revenue of the project, with around 70 per cent of the cost going to toward IT and business processes.
IT executives, CFOs and GST project managers from over 300 listed companies and government agencies responded to the report, titled The impact of GST on corporate IT systems: an Australian survey.