Companies face 'killer' GST timetable; Gartner

IT managers who attempt to make their systems GST compliant without consulting across their entire organisation will fail, an industry analyst has warned.

Gartner Group's research director, Bruce McCabe, says GST is a whole of business issue and should not be approached from a pure IT perspective.

"IT managers in isolation aren't successful," McCabe said. "They have to work with every department. It's a multidiscipline problem."

In fact, the compliance process is so demanding on companies that a New Zealand IT manager who spoke with McCabe called it a "Get your Shit Together" tax. New Zealand introduced a GST more than a decade ago. In Australia, the GST becomes effective on July 1, 2000.

Gartner has been surveying IT managers and vendors in Australia about GST issues since last December, and McCabe says the research paints a disconcerting picture.

He said that in July 60 per cent of large enterprises had done no GST preparation, around one-third had set up a GST team to examine the issue and less than 5 per cent had actually begun the GST compliance process.

"It's a substantial challenge to get ready in time," McCabe said. "The real killer issue is the timetable. Given two years, it could be done."

Additionally, Y2K falling in the middle of the GST compliance process is a major disadvantage to enterprises, especially those who have issued a lockdown mandate, such as the banks.

"We're encouraging them to forget about that [lockdown]," McCabe said.

McCabe said the GST schedule was so tight that some organisations have already resigned themselves to missing the deadline and are trying to minimise that impact on their business. He cited a university in Queensland that says it has "no hope in hell of getting ready by July 1".

The government has not finalised its entire taxation legislation, so it is impossible for the industry to factor in all considerations, McCabe said.

On the positive side, enterprises planning major hardware purchases for mid-2000 could make substantial savings. Currently, the hardware tax level is 22 per cent. Post-GST, hardware will attract a 10 per cent GST that can be claimed back, so will effectively become 22 per cent cheaper, McCabe said.

"For most businesses, and indeed government departments, the policy must be to delay hardware spending until after July 1," McCabe advised. "You'd be mad not to realise the savings.

"If you're looking at delaying your purchases, plan well in advance and get it in the vendor's forecast and make sure they've got stock."

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