Disruption of Black Economy to continue
The Government will expand its 2018-19 Black Economy Budget measures, announcing in this Budget that it will make ABN holders more accountable to the ATO.
From 1 July 2021, ABN holders will be stripped of their ABN if they do not meet their income tax lodgement requirements. Further, they will be required to annually confirm the accuracy of their details on the Australian Business Register from 1 July 2022, at the time of lodging their income tax return.
Under the current law, ABN holders can continue to hold their ABN regardless of whether or not their income tax obligations are up to date.
This measure is estimated to contribute $22.2 million to the Budget over the forward estimate, although this is only expected to translate to cash collections of $4.7 million over the same time frame.
BDO welcomes the implementation of policy that does not provide an additional burden on taxpayers who currently comply with the law. The Black Economy Taskforce report identified that the ABN system formed a basis for taxation avoidance, including fraudulent invoicing. Strengthening the controls for continued eligibility for ABNs should go some way toward curbing ABN abuse.