Australian PC assemblers and manufacturers received a long- awaited windfall in Tuesday night’s budget, with the federal government announcing that duties on imported IT components would be lifted. Domestic PC manufacturers currently pay 3%-5% on many of their IT inputs. As foreshadowed earlier this week, the budget also promised to make expenditure incurred in the process of identifying and resolving Y2K-related software problems immediately tax deductible. To a limited extent this is provided for in the current (tax) law but amendments will be made where this is not so, said Treasurer Peter Costello. The downside is that the purchase or development of software not related to year 2000 compliance must now be amortized over two and a half years. Previously it was an immediate tax write-off. Australian Information Industry Association executive director Peter Upton described the two and a half year amortization period for general software as a nasty sting in the tail.
