Small businesses are urging the government to exempt them from the $500 fee for complying with its latest anti-money laundering service AUSTRAC beginning July 1.

The new program works with local businesses in their compliance with anti-money laundering and counter-terrorism financing legislation.The charged fees covers a company's international fund transfer instruction report. Business groups are arguing that the cost of compliance will be expensive in the long run.

CPA Australia policy advisor Gavan Ord says while the fee will only affect financial institutions from July 1, the second batch of legislation will introduce the levy to hundreds of industries including real estate, law and retail.

"At the moment, the levy will hit everyone in finance from the big four banks down to individual financial planners, even those working in the suburbs. But in the future the Government has said it will extend that law to accountants, real estate agents, jewellers, and so on... tens of thousands of businesses," he told Smart Company."Our preference is that the government at least has some exemption for small business. The best possible outcome in this area is that the government funds AUSTRAC's own behavior in this area rather than imposing a fee on business."

Following the new anti-money laundering rule,　businesses be charged a $500 fee for registering reports with the service in addition to a transaction cost of $1 for every report qualified transaction they submit.