The ATO has released the ‘General Interest Charge’ (GIC) and Shortfall Interest Charge (SIC) percentages for the first quarter of 2018-19, ie July to September 2018:
- GIC annual rate – 8.96%
- GIC daily rate – 0.02454794%
- SIC annual rate – 4.96%
- SIC daily rate – 0.01358904%
FJM 12.6.18
[ATO website: GIC, SIC; LTN 106, 5/6/18; Tax Month – June 2018]
Study questions (answers available)
[Hint – try reading the ATO articles on each of the GIC and SIC – see links in article]
- Is the GIC rate a ‘base rate’ (roughly equal to the Commonwealth’s cost of funds) plus an uplift amount of 7% points?
- Does the GIC accrue on amounts paid late?
- Is the SIC the same ‘base rate’, plus an uplift factor of 4% points?
- Does the SIC accrue on a ‘shortfall’ in tax, over the amount returned, after the Commissioner amends the amount of tax due (with GIC taking over after then)?
- Have the ‘base amount’, SIC and GIC gone down since the previous quarter?
- Is the shortfall uplift, to approximate a bank’s lending margin, to stop taxpayers using the Cwth as a cheap source of finance?
- Is the remaining about of the GIC uplift a penalty for paying late?
- Does the SIC and GIC accumulate quarterly?
