• Federal Budget 2016 - Other

Establishing the Tax Avoidance Taskforce and better protection for whistleblowers

The Government will introduce a series of measures aimed at significant tax avoidance. These measures form part of the Government’s Tax Integrity Package, which will strengthen the integrity of Australia’s tax system. The taskforce is expected to raise $3.7 billion in tax liabilities over the next four years, largely funding the Government’s proposed tax breaks.

Tax Integrity Package

The Treasurer warned that those doing the wrong thing should have no doubt that deliberate tax avoidance and evasion will no longer be tolerated, with the Treasurer now referring to these activities as tax crimes.

The centrepiece of the package is the creation of the Tax Avoidance Taskforce. This will be charged with enabling the ATO to undertake enhanced compliance activities targeting multinationals, large public and private groups, and high wealth individuals. These better targeted audits are tasked with delivering higher collections of unpaid taxes.

The Government also announced enhanced protection for tax whistleblowers to take effect from 1 July 2018. Individuals, employees, former employees and advisers will benefit from ‘strengthened’ protections where they disclose information to the ATO on tax avoidance behaviour.

While the details are scant, it is understood that whistleblowers can expect to have their identity protected, and have protection from civil and criminal action for disclosing information to the ATO.

In addition, new legislation will be introduced to strengthen data sharing protocols between the ATO, ASIC, Australian Crime Commission, the Australian Federal Police, and AUSTRAC, leading to a more efficient approach to dealing with tax crime.

BDO Comment

BDO supports any measure targeted at increasing collections from those engaging in tax crimes. A flow-on effect is likely to be an increase in audit scrutiny by the ATO of significant taxpayers with a commensurate increase in the administrative burden for affected, but innocent, taxpayers. In these circumstances, maintaining a good relationship with the ATO will become more important than ever.