Government to supercharge ATO, Tax Practioners Board in tax push
The economy is expected to reap nearly a $3.2bn tax bonanza from a crackdown on dodgy accountants and big businesses that fail to pay their due.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Australia is expected to reap nearly a $3.2bn tax bonanza from a crackdown on dodgy accountants and big businesses that fail to pay enough tax, after the government announced it would hand regulators almost $1bn to ramp up enforcement and extend anti-avoidance taskforces.
But billions in tax disputes are looming over the government’s tax enforcement efforts, with a $2.8bn blowout taking the outstanding tax bill to nearly $12.5bn. Almost $999m will be doled out to the Australian Taxation Office over the coming four years to fund a raft of enforcement activities, with the added enforcement budget expected to increase payments by $1.4bn, including $402.6m to the states through higher GST payments.
The extra cash will add to the ATO’s nearly $24bn budget, which will rise to $24.49bn in the coming year.
The ATO will also add more than a thousand public servants to its numbers, taking total staffing at the sprawling government agency to 20,994.
Of the extra money, almost $717.8m will go to funding a two-year expansion and one-year extension of the Tax Avoidance Taskforce, which brings together a string of regulatory agencies aimed at policing the tax system.
The taskforce is examining the tax arrangements of large companies, as well as high-net worth individuals.
A further $155.5m of the funding top-up will go to the Shadow Economy Compliance Program, aimed at stamping out under-reporting of income, illicit tobacco, and other shadow economies.
The ATO will direct $75.7m to its Personal Income Tax Compliance Program, which is aimed at auditing key areas of noncompliance.
Wealthy Australians and medium and large businesses are also in the firing line, with a $50m top up to the Tax Integrity Program, to keep it running beyond July 2026.
The program is aimed at ensuring “timely payment” of tax and superannuation.
These programs together are expected to deliver an extra $3.2bn in tax receipts by 2029, with much of it weighted towards the final years. In total, the government is expected to book a further $52.3m from the programs in 2025-26.
This will rise to $2.27bn in 2028-29.
But Australia is also facing uncertainty over nearly $12.5bn in significant tax disputes, disclosed in the budget, with the Australian Taxation Office warning it is owed claims for which a provision has not been made.
These returns in dispute have soared from $9.7bn disclosed in last year’s budget. Many relate to tax bills handed to corporate Australia by the ATO in recent years.
Property giant Lendlease was slapped with a $112m bill last year over tax deals relating to its retirement living business.
The ATO revealed in November it had secured its largest tax take ever from corporate Australia, approaching $100bn, after turning the screws through the Tax Avoidance Taskforce. Tax office data showed 96 per cent of companies paid approximately the right amount of tax in 2021-22. But almost 1 in 3 companies did not pay tax.
The ATO is also now closely tracking companies with smaller turnovers, with the tax office handed the power to investigate businesses trading $100m or more.
Previously the tax reporting was limited to companies with a turnover in excess of $200m. The government is also banking on a budget bump from a crackdown on tax accountants, in the wake of the scandal around audit and consulting giant PwC Australia.
New powers handed to the Tax Practitioners Board are expected to deliver a boost to the bottom line, with the government revealing it will roll out tougher penalties to the regulator which oversees the tax accounting industry.
The Tax Practitioners Board will be given strengthened sanctions, allowing it to ban accountants for 10 years, as well as apply to the Federal Court to, for the first time, impose penalties on dodgy tax professionals.
The TPB will also be empowered to issue infringement notices as well as see unregistered “tax preparers” face criminal penalties. But the TPB will not go ahead with permanently disbarring tax accountants.
Originally published as Government to supercharge ATO, Tax Practioners Board in tax push
The investor’s guide to the election
What’s in the election for investors? Quite a lot actually with stark differences emerging between the major parties on investment choices from pensions to superannuation.
Online betting giant tries to settle blockbuster case
Entain, which owns online betting platforms Ladbrokes and Neds, is hoping to nip an anti-money laundering case brought against it last year in the bud.