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ATO Credit Card Payment Ban Delayed After Government Steps In - Canberra, ACT
Smart summary
The federal government will fund a temporary extension of credit card payments to the Australian Taxation Office, giving small businesses and taxpayers more time to prepare for the change.
The Australian federal government has announced a temporary extension of credit card payments to the Australian Taxation Office (ATO), responding to concerns from small businesses and taxpayers about the planned withdrawal of the payment option.
The decision, announced on Friday, 9 October 2026, means the ATO will continue accepting credit card transactions until 30 June 2027. The government has committed transitional funding to cover the costs of the extension, with the final costs to be determined through the Mid-Year Economic and Fiscal Outlook process. Treasury Ministers +1
The change follows an earlier ATO announcement that it intended to stop accepting credit card payments for tax bills from December 2026. That proposal was connected to changes in Australia's card-payment system, including the removal of surcharges on debit and credit card transactions. The ATO had raised concerns about absorbing the fees associated with credit card payments, estimating the cost at approximately $200 million annually. ABC News +1
The planned withdrawal attracted criticism from business representatives, who argued that credit cards can be an important cash-flow management tool. Some businesses use credit cards to manage the timing of tax payments alongside wages, supplier invoices, rent and other operating expenses. Removing the option at short notice could have required affected businesses to reorganise their payment arrangements.
The government's intervention is intended to provide additional time for businesses and individuals to prepare. According to the official announcement, the ATO will have more time to communicate with affected taxpayers, explain alternative payment options and consult on arrangements for people experiencing financial hardship. The government has also asked the tax office to identify ways to support taxpayers who cannot readily use other payment methods. Treasury Ministers +1
The extension does not mean credit card payments will remain available indefinitely. After 30 June 2027, the ATO is expected to continue accepting credit card payments through third-party providers, alongside other payment methods, including debit cards and bank transfers. Taxpayers should check the ATO's current payment guidance before choosing a method for an upcoming tax bill. Treasury Ministers
The announcement highlights the challenge of changing payment arrangements while balancing business needs, transaction costs and broader payment-system reforms. For small businesses that rely on credit cards to manage their finances, the additional transition period offers more time to review cash flow and prepare for the eventual change.
The government has indicated that further consultation will help determine how affected taxpayers can be supported. The practical impact will depend on the final arrangements, the payment options available to individual taxpayers and the costs associated with using those alternatives.
What happens next: Businesses and individuals should monitor official ATO guidance for updates to payment arrangements ahead of the June 2027 transition date.
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The Australian federal government has announced a temporary extension of credit card payments to the Australian Taxation Office (ATO), responding to concerns from small businesses and taxpayers about the planned withdrawal of the payment option.
The decision, announced on Friday, 9 October 2026, means the ATO will continue accepting credit card transactions until 30 June 2027. The government has committed transitional funding to cover the costs of the extension, with the final costs to be determined through the Mid-Year Economic and Fiscal Outlook process. Treasury Ministers +1
The change follows an earlier ATO announcement that it intended to stop accepting credit card payments for tax bills from December 2026. That proposal was connected to changes in Australia's card-payment system, including the removal of surcharges on debit and credit card transactions. The ATO had raised concerns about absorbing the fees associated with credit card payments, estimating the cost at approximately $200 million annually. ABC News +1
The planned withdrawal attracted criticism from business representatives, who argued that credit cards can be an important cash-flow management tool. Some businesses use credit cards to manage the timing of tax payments alongside wages, supplier invoices, rent and other operating expenses. Removing the option at short notice could have required affected businesses to reorganise their payment arrangements.
The government's intervention is intended to provide additional time for businesses and individuals to prepare. According to the official announcement, the ATO will have more time to communicate with affected taxpayers, explain alternative payment options and consult on arrangements for people experiencing financial hardship. The government has also asked the tax office to identify ways to support taxpayers who cannot readily use other payment methods. Treasury Ministers +1
The extension does not mean credit card payments will remain available indefinitely. After 30 June 2027, the ATO is expected to continue accepting credit card payments through third-party providers, alongside other payment methods, including debit cards and bank transfers. Taxpayers should check the ATO's current payment guidance before choosing a method for an upcoming tax bill. Treasury Ministers
The announcement highlights the challenge of changing payment arrangements while balancing business needs, transaction costs and broader payment-system reforms. For small businesses that rely on credit cards to manage their finances, the additional transition period offers more time to review cash flow and prepare for the eventual change.
The government has indicated that further consultation will help determine how affected taxpayers can be supported. The practical impact will depend on the final arrangements, the payment options available to individual taxpayers and the costs associated with using those alternatives.
What happens next: Businesses and individuals should monitor official ATO guidance for updates to payment arrangements ahead of the June 2027 transition date.
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