Opposition leader Angus Taylor has called changes to surcharge fees for small businesses while the Australian Tax Office refuses to absorb credit card transaction costs as hypocritical.

The ATO announced it would stop accepting credit card payments altogether to avoid having to absorb those processing costs On the same day Labor’s ban on credit and debit card surcharges came into force, the

Mr Taylor on Friday argued that prohibiting businesses from adding payment processing fees at point-of-sale terminals while letting the ATO skip the cost was a double standard.

“Seriously, you couldn’t make it up. Labor has decided that they’re going to have a giveaway at the expense of small businesses. They can’t absorb this,” he said.

“This Prime Minister is pretending that somehow there’s going to be a discount on his behalf.

“Actually, what’s going to happen is everyone will pay more.”

One Nation leader Pauline Hanson echoed Mr Taylor’s calls that the ATO should reverse this decision immediately.

She said the government can’t impose payment costs on small businesses while allowing the tax office to avoid them.

“The Albanese Government has walked into another unintended consequence because they never think anything through.” Senator Hanson said.

“The Prime Minister and Treasurer promised Australians a cheaper coffee.

“Instead, it’s more expensive than the old surcharge while small business is going to be squeezed by the ATO.”

Labor announced the ban earlier this year to rid Australian shoppers of pesky surcharges amid concern the checkout price differed from the listed menu price.

But the ATO’s decision yesterday to no longer accept credit cards as a payment method from November 30 came as a surprise.

The ATO had insisted it would “not be appropriate” for the merchant fees to be burdened onto taxpayers.

Australian Chamber of Commerce and Industry boss Andrew McKellar said the ATO’s decision to stop accepting credit card payments was unfair and contradictory for small businesses.

Mr McKellar described it as “complete hypocrisy” as many small businesses rely on credit cards to manage cash flow.

“I think small business are angry and they’re right to be so,” Mr McKellar told 4BC on Friday.

“I mean, they’re under pressure on every front at the moment. We just had a fourth interest rate increase this week. They’ve got rising costs. They’re trying to manage cash flow.

“They’re trying to keep your head above water.”

Labor MP Jerome Laxale labelled the surcharge reform as “long overdue” and “fixing a broken system” during a News24 interview on Friday where he also hinted at government intervention.

When asked whether the government could speak to the ATO, Mr Laxale said “I would be surprised if discussions hadn’t been had”.

“I also note that there’s been a strong backlash to it, and you know governments need to listen to that too,” he added.

“The ATO put out (a statement) yesterday, that was the first I knew that they made that decision.

“So, you know I’m not surprised that there’s been a reaction to that.”

While Mr Laxale and Treasurer Jim Chalmers said the changes were designed to help Australians with the cost-of-living, Mr McKellar argued business would just have to pass it on in the cost of products and services.

Speaking in Queensland on Thursday, Dr Chalmers said the Small Business Ombudsman would help small businesses adapt to the new arrangements.

He said the ban would save consumers $1.6 billion in card surcharges and save businesses $910 million each year, while also downplaying the number of businesses who use surcharges.

Shadow Treasurer Tim Wilson accused Labor of “gas lighting” small businesses.

“Small business is being double ‘tapped’ by the Albanese government when there’s already near record insolvencies, business closures and collapses in profitability”, Mr Wilson said.

When asked about its decision on Friday, the ATO directed The Nightly to a website statement published hours after the deadline.

In the statement, ATO Commissioner Rob Heferen doubled down on their position — insisting the cost would be significant to taxpayers with merchant fees estimated to cost “almost $200 million annually and expected to continue increasing over time”.

He claimed negotiations with credit card companies had failed to yield a low-enough merchant fee rate.

“We remain committed to supporting taxpayers who need assistance,” Mr Heferen stated.

“Anyone experiencing difficulty meeting their tax obligations should contact the ATO or speak with their registered tax professional as early as possible.”