ATO launches crackdown to recover billions in unpaid taxes

Businesses that fall behind on their tax and superannuation obligations could be reported to credit bureaus, the Australian Taxation Office (ATO) has warned, potentially making it harder and dearer for them to secure loans.

After the ATO went easy on enforcement during the pandemic, it said it had returned to “business-as-usual debt collection”. As a result, it said it expected to disclose the debts of more than 9,000 businesses this month.

If a business falls behind on its tax and super obligations, it may receive a ‘notice of intent to disclose’ letter. It then has 28 days to settle its debt or enter into an appropriate arrangement with the ATO. Otherwise, the debt may be reported. The ATO has forecast that it would issue more than 50,000 notices of intent this financial year.

ATO Assistant Commissioner Jillian Kitto said paying or engaging with the ATO was the only way to stop a business’s tax debt becoming visible in credit rating checks.

“We want to work with businesses to help them get on top of their debts. Anyone with a debt is encouraged to reach out to us as soon as possible,” she said.

“We give businesses ample opportunity to re-engage with us. However, those who show continued and ongoing disregard for their tax and super obligations will have their debts disclosed. While we do not take disclosures lightly, consequences will apply to businesses who refuse to pay or engage with us.”

Ms Kitto said that after the ATO focused on tax help and stimulus payments during the pandemic, it now felt it needed to reestablish a culture of paying tax on time.

“There is over $5 billion owed by businesses who currently meet the criteria for disclosure. We must draw a line in the sand to protect the Australian community and other creditors, and to ensure a level playing field for businesses who do the right thing,” she said.

“If you have an outstanding tax debt, we strongly urge you to pay it or reach out to us or your tax professional so we can provide the right support.”

Published: 30/10/2023

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