The Australian Taxation Authority (ATO) has released a list of industries most likely to be involved in the “shadow economy” as it received 43,000 tip-offs in the 2021-2022 fiscal year.
Architecture and construction, hairdressing and beauty services, cafes and restaurants, road freight, management advice and related consulting services Tips It was sent to ATO.
Of the Australian states and territories, New South Wales had the highest number of tip-offs in excess of 13,400, followed by Victoria at 11,500 and Queensland at 9,200.
The Shadow economyFormerly known as the shadow economy, refers to fraudulent and illegal activity that occurs outside the tax and regulatory systems.
Companies and employees may engage in the above practices to avoid paying the appropriate amount of tax. Common examples include asking customers for cash, paying workers “cash on hand”, and not recording all sales.
According to the ATO, the shadow economy causes Australia to lose $ 11 billion (US $ 7.6 billion) in taxes each year.
ATO Deputy Chief Cabinet Secretary Peter Holt said the tip-off would help tax authorities deal with the shadow economy and protect honest businesses.
Holt admitted that it had been difficult for some companies in the last few years, but said it was inappropriate to get unfair benefits from not following the rules.
“As businesses recover from the effects of COVID and natural disasters, it is more important than ever to protect the vast majority of businesses that are honest and trying to do the right thing.” Holt said..
“All dollars of dodged taxes are dollars that cannot be used for important services such as health and geriatric care.
“We have witnessed how dependent the community is on these important services over the past few years.”
Employees are not exempt from scrutiny
Aside from local businesses, the tax authorities knew that many workers were demanding cash, so the Deputy Chief Cabinet Secretary warned that the ATO would monitor employees.
He also welcomed tip-offs from the community, stating that more than 90% of the 43,000 tip-offs are suitable for further research or intelligence purposes.
“We receive tips from other companies, customers, the general public, and even our employees,” Holt says. “The tip-off surge shows that the community is no longer trying to slip this action.”
At the same time, Holt noted that the growing popularity of digital payments in Australia did not curb the shadow economy and urged tax professionals to pay attention to potential shadow economy behavior.
“The ATO will take firm action against business owners who knowingly avoid fair tax burdens,” he said.
“If you think these companies keep hiding in the shadows and don’t pay a fair tax burden, they’re wrong.”
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Alfred Bui is a Melbourne-based Australian reporter with a focus on local and business news. He is a former small business owner and holds two master’s degrees in business law and business law. Contact him at [email protected]