ATO Blitz on cash transactions
Friday, Mar 20, 2015
One financial peak body has suggested to the government that consumers who take part in discount-for-cash deals should also be targeted.
The extent of the problem of the cash economy is difficult to measure, but past estimates suggest the cost to the nation’s revenue would be in the billions rather than the millions. This huge loss of revenue is due to lost GST and tax from business income, but also PAYG and superannuation contributions.
The Tax Office is presently running campaigns targeting what it deems to be higher risk industry groups — restaurants and cafes, building and construction, and hair and beauty. Its data matching endeavours have identified around 275,000 businesses as potential under-disclosers of realistic levels of income.
In a submission to the government in the long lead-up to the upcoming federal budget, Chartered Accountants Australia and New Zealand (CA) has suggested a “never to be repeated” amnesty for people to declare any unpaid tax and not face prosecution, or perhaps reduced penalties.
However the head of CA Michael Croker says the offer should be followed by even tougher penalties, including sanctions such as good behaviour bonds payable to the Tax Office.
He also says it is essential to change the public’s attitude, who were often happy to go along with the cash-in-hand offerings. “Cheating the tax man is seen as a victimless crime, but when you are old and trying to get a bed in a nursing home and there’s no government funding, then it is a different matter,” he says.
Croker even goes so far as to suggest that people who are discovered benefiting from the cash economy should feel some consequences. For example, those who enjoy discounted rent by paying in cash could perhaps be denied access to certain tenant rights legislation or some forms of insurance protection.
Tax Office targets include:Cafes and restaurantsHair, beauty and nail servicesCleaning servicesCarpentryElectricalHouse constructionPainting and decoratingPlumbingRoad freightWaste skips.
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