Audits reap nearly $8b for the Tax Office
Wealthy Australians and small-business operators claiming dodgy tax deductions have handed over nearly $8 billion in extra payments to the Australian Tax Office after being audited.
New ATO figures show almost 1.3 million so-called “client engagement activities” – including sometimes painful tax audits and actions to stop incorrect claims – added $7.7 billion to federal government coffers last financial year.
Outgoing Australian Taxation Commissioner Chris Jordan. Alex Ellinghausen
The ATO made nearly half a million real-time prompts to taxpayers lodging their annual returns, helping stem incorrect claims. The automated efforts helped save $61.1 million of revenue.
More than 1 million specialist prompts related to crypto asset sales and more than 104 million pieces of pre-filled data sped up annual tax returns and stopped incorrect claims.
Automated systems sent more than 11,000 prompts to sole trader taxpayers warning them to check amounts reported in their 2021-22 tax return if they differed from others with similar tax arrangements. As a result, 16 per cent of the sole traders adjusted their annual return.
Outgoing Tax commissioner Chris Jordan said the results were part of 20.3 million income tax lodgments finalised at tax time 2022, with gross tax collections of $730 billion. More than 83 per cent of tax return lodgments were completed on time in the 2021-22 income tax year.
Annual return refunds to Australian taxpayers totalled $154 billion.
Mr Jordan said the ATO’s debt book had increased by 89 per cent in the four years to 2023, reaching $50.2 billion at June 30. He said small businesses continued to be over-represented in tax debt.
“It’s our responsibility to ensure a level playing field as we support businesses who are doing the right thing and paying on time,” he said.
“For those who have been unwilling to work with us, we took strong and deliberate action as we increased our activities across debt collection.”
The ATO’s annual report revealed a record $6.4 billion had been collected by the Tax Avoidance Taskforce through a crackdown on multinationals and large companies, including oil and gas sector giants.
About $4.4 billion of the windfall is linked to earlier interventions by the ATO with oil and gas firms.
“Our interventions, paired with strong commodity prices, mean some oil and gas companies are now among the biggest taxpayers in Australia,” Mr Jordan said.
Wider compliance activities by the ATO also captured billions in additional revenue for the federal budget.
The Serious Financial Crime Taskforce collected $139 million in cash, with $1.4 billion collected by the black economy taskforce. The cross-government Phoenix Taskforce found $108 million in additional cash collections by the ATO.
Senate estimates hearings on Wednesday were told the ATO estimates the superannuation guarantee gap – the amount of unpaid employer contributions – is about 5.1 per cent, or more than $3.6 billion.
The ATO says the gap is closing, down from about 5.7 per cent in 2015-16. The COVID-19 pandemic disrupted some compliance activity related to unpaid liabilities.
An increase in voluntary contributions to employees’ retirement accounts was due in part to greater visibility of super account balances and employer contributions and regular reporting of employer payroll information, including through the single touch payroll system.
Mr Jordan is due to step down in early 2024, after two terms as commissioner. A recruitment process to find his replacement is under way by the federal government.
Introducing your Newsfeed
Follow the topics, people and companies that matter to you.
Find out moreRead More
Latest In Federal
Fetching latest articles