The Australian Information Industry Association (AIIA) has come out firing in the wake of last week’s Federal Budget. In its sights is the new measure that removes immediate tax- deductibility of general software, replacing it with a deduction that must be amortized over two and a half years. When I read the detail I was appalled, AIIA deputy executive director Rob Durie told a press gathering last week. Despite generous new tax breaks on Y2K-related business expenses, the AIIA says the 40%- per-year-over 2.5 years amortization rule will raise the general cost of software to business by a factor of 6%-10%. In another blow, bulk IT purchases will be aggregated and must be amortized. This ruling would apply to such items as per-seat licensing deals. Another powerful critic has emerged in the form of the Institute of Chartered Accountants, which has highlighted the fact that business is only eligible for Y2K tax deductions until the 2000. It is thought that many Y2K expenses will extend far beyond that date.
