Legislation is required for the measures that address GST charged on insurance contracts, finance leases and lay-bys.
WHK tax principal Scott Mason says the GST rise is a nightmare for insurance and other companies collecting regular payments, which have to advise thousands of customers of tiny monthly payment changes and alter computer systems to cope.
"We are well down the track of advising our clients.
"It's all very well saying `Here are the changes.
We will show you the legislation in a month', then a month later we have the new GST regime," he said yesterday.
Mr Dunne said the 12.5% rate would be grandfathered for health and general insurance contracts and finance leases that straddle October 1, subject to criteria.
Accountants said they needed to see more detail on that.
If a lay-by was picked up after October 1, the 15% GST rate was expected to apply to all payments, but Mr Dunne said lay-by payments before October 1 on such goods would have a 12.5% GST rate applied.
"In all of these cases, legislative change will either address unmanageable compliance costs for affected businesses or provide much needed certainty," Mr Dunne said.
Mr Mason said the signalled changes were to be welcomed, subject to seeing the detail.
"The disappointing aspect is that those businesses that have been proactive in seeking advice and reviewing internal systems have possibly incurred costs unnecessarily due to the late timing of these announcements."
The lay-by changes made sense as payments might have already occurred at 12.5%.
Backdating a rate change was always going to be difficult.
The new changes meant common sense prevailed in that the 15% would apply to payments after October 1, he said.
However, those people with lay-bys needed to appreciate that any unpaid balance at October 1 would be subject to higher GST.
Assuming someone had bought a $1125 appliance on lay-by, that would include GST of $125.
Assuming they had paid off half by October 1, the balance of $562.50 became a balance of $575 due to the increase in GST.
"This still involves additional compliance," Mr Mason said.
Goods bought on long interest-free periods would escape increased GST payments as the transaction had already taken place.
Someone bought the appliance on interest-free terms and a finance company had taken over the transaction.
One of the areas of confusion included the buying of new vehicles.
If someone bought a vehicle now but was not taking delivery until October 1, there was some confusion around what GST to charge, he said.
"I was interested to note that the major issues facing industries like tourism were not addressed in Mr Dunne's comments.
If you book and pay for accommodation in June for October 10, what rate of GST should apply? If it is at 15%, do you have to pay a supplementary rate or does the hotel have to absorb a further loss?"That also applied to other industries, Mr Mason said.
There was not enough detail in Mr Dunne's comments to speculate on the true effectiveness of the proposed changes.
Mr Mason's concern was that by the time it was translated into sensible legislation, GST would be ready for introduction, leaving uncertainty for his clients.
PricewaterhouseCoopers GST partner Eugen Trombitas said it was encouraging and positive the Government had identified potential problems and acted decisively.
