Additional funding to toughen up the ATO
Serious and organised crime taskforce
As part of the Government’s tax integrity measures, $28.2 million will be provided to the ATO in order to target serious and organised crime within the tax system. This extends an existing measure by a further four years to 30 June 2021.
The Government estimates that organised crime costs Australia between $10 billion and $15 billion annually. The additional funding is intended to ensure that the ATO works closely with federal, state, and territory agencies to combat serious and organised crime.
Black economy taskforce
The Government will also provide $32 million for one year of additional funding for ATO audit and compliance programs to better target black economy risks.
This measure provides further funding to ATO programs that focus on businesses with a turnover between $2 million and $15 million that have disengaged from the tax system. These programs are directed at changing black economy and related behaviours such as non-lodgement, omission of income, and non-payment of employer obligations.
In recent years, the ATO has targeted businesses that are not declaring cash revenues with a focus on businesses in high risk industries such as cafes and restaurants, building trades, beauty and nail specialists, and cleaners.
Additional funding to the ATO to target non-compliance should be welcomed by businesses who do the right thing. However, experience says that the ATO will need to be careful to discriminate carefully between those who actively disengage from the system and those who try, but fail, to comply with their obligations.