Federal Budget 2018: Tax cheats targeted under $5.3 billion plan to stop ‘black economy’

A MAJOR crackdown on the black economy will stop Australians using large wads of cash to pay and catch out those cheating their tax liabilities.

A MAJOR crackdown on the black economy will stop Australians using large wads of cash to pay and catch out those cheating their tax liabilities.

A beefed up multi-agency Black Economy Standing Taskforce will be rolled out which will include mobile strike teams and increased intelligence to detect those rorting the system.

The moves are expected to deliver revenue of $5.3 billion over the next four years.

This will involve a tougher stance on taxable reporting, stings on illegal tobacco and increased policing by the Australian Taxation Office.

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The Turnbull Government announced a tougher stance on taxable reporting and stings on illegal tobacco. Picture: Supplied

In a bid to stamp out tax avoidance and money laundering, the government will put a limit on cash payments of up to $10,000 made to businesses for goods and services from July 1 next year.

The move will help put a stop to businesses trying to hide transactions and reduce their tax implications.

Transactions of more than $10,000 must be made electronically so they can be tracked or via the old-fashioned payment method, the cheque.

This will not apply to transactions made with financial institutions or consumer to consumer non-business transactions.

And a new black economy hotline will also be set up to allow people to dob in anyone making under-the-table transactions.

The government has described the booming black economy as “complex, costly and growing” and one that is doing serious harm to the nation’s tax system.

Treasurer Scott Morrison has announced tough measures to target the so-called ‘black economy’. Picture: AP

More than $318 million will be pumped into strategies over the next four years to help tackle widespread tax avoidance.

Businesses will also no longer be allowed to claim deductions for payments to their employees such as wages where they have not held back any amount of PAYG.

The Black Economy Taskforce was set up in 2016 and they recently made their final recommendations in a report to Government on how to put the brakes on illegal transacting.

The ATO will boost its comprehensive data analytics and data matching capabilities to catch out cheats.

Organised crime groups involved with illicit tobacco are being targeted. Picture: Supplied

Industries who will also come under increased scrutiny will include security providers and investigation services, road freight transport and computer system design and related services.

Tax agents will also come under be under close watch with additional funding given to the Tax Practitioners Board to take action again any those who are facilitating the black economy.

Australian Business Numbers (ABNs) will also be strengthened by the Taskforce to help improve the identity and legitimacy of businesses.

There will also be an Illicit Tobacco Taskforce to investigate, prosecute and dismantle organised crime groups involved with illicit tobacco.

And anti-phoenixing measures will also be introduced to prevent small businesses being ripped off by other businesses and avoid paying their bills.

Originally published as Federal Budget 2018: Tax cheats targeted under $5.3 billion plan to stop ‘black economy’