THE CASH ECONOMY AND THE AUSTRALIAN TAX OFFICE

 

It has recently been revealed that the ATO will again begin a program to review operators in Australia’s cash economy. The program is to begin in Perth and Canberra with tax officers visiting hundreds of restaurants, cafés, hair & beauty salons & other small businesses including building & construction businesses that have ready access to cash to make sure their business registrations & practices are up to date.

The ATO have stated that operations with large amounts of cash present “a major risk indicator” and the ATO are focusing on ensuring proprietors do the right thing. Further the ATO have indicated that the program will extend their efforts to other states at the conclusion of the current program.

In focusing on the industries mentioned above, the ATO have concentrated their data analysis on the sectors that might have an “unfair advantage”. The ATO has stated that those businesses have reported “unrealistic income relative to the assets and lifestyle of the businesses and owner”.

The minister for Revenue & Financial Services, Kelly O’Dwyer has stated that “Black Economy activities are both unfair for honest taxpayers and undermine our tax & welfare systems”. In a federal government mid-year report, the Australian Bureau of Statistics had suggested that the nation’s underground economy could account for as much as $24 billion or 1.5% of the country’s GDP.

The Turnbull government unveiled a “Black Economy Taskforce” at the end of 2016 to consider a variety of tax enforcement measures from overseas that could also work in Australia. O’Dwyer has stated that the taskforce has been charged with delivering an interim report to government by March 2017 with a final report to be handed down in October which will include an overarching whole of government policy framework and detailed proposals for action to counter the “black economy”.

Whether the black economy is as large as that stated above, the ATO program will focus on education as a first step in ensuring compliance.

If you are unsure of the tools & information required to correctly register, lodge on time and maintain accurate business records, then you should call us at the Garis Group as we are small business specialists. We can arrange an obligation free assessment of your business structure including records to keep you out of the ATO radar.

 

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