Small businesses avoiding or mistaking tax liabilities are costing the budget more than $11 billion a year, with dodgy claims and the cash economy contributing to a bigger loss than from individuals or large companies.
The latest Tax Office tax gap analysis shows in 2015-16 small businesses didn't pay about 12.5 per cent of total liabilities, and more than $7 billion of the lost revenue was attributed to the cash economy.
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Tom McIlroy is the Financial Review’s Canberra bureau chief based in the press gallery at Parliament House. He was previously the AFR’s political correspondent. Connect with Tom on Twitter. Email Tom at thomas.mcilroy@afr.com