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ATO audits reap $15b in unpaid tax

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Voluntary disclosures related to mistakes and omissions in tax returns raised another $1 billion, including $146 million in GST liabilities and cash collections of $131 million.

“The ATO is continuing to invest more effort and focus on supporting clients to get it right prior to lodging or even when they are first starting out in business,” officials told Parliament in the ATO’s annual report.

“These are complemented by our deliberate efforts to improve future behaviour wherever we engage with clients. We estimate the impact of our pre-emptive strategies and of sustained compliance following our engagements in prior periods, known as wider revenue effects.”

The report showed the complexity of integrated compliance, designed to identify taxpayers considered “endemic non-compliers” with tax laws. They include organisations not engaging in criminal behaviour but failing to comply with the rules.

One such organisation comprised more than 40 entities with assets totalling approximately $70 million.

Wider compliance activities by the ATO also captured billions.

The tax avoidance taskforce raised $1.9 billion in liabilities and $1.1 billion in cash collections; while the serious financial crime taskforce raised $235 million in liabilities and $71 million in cash.

The cross-government black economy program raised another $1.1 billion.

Institute of Public Accountants senior tax adviser Tony Greco said the increased revenue was the result of better data use, and some 70,000 tip-offs from members of the public.

“They’ve received a lot more funding, courtesy of things like the black economy taskforce,” he said.

“The ATO has got more resources and obviously there’s a payback for that. The government expects a return and with extra funding they can produce better returns for their money.

“The larger taxpayers always attract a lot of focus but they’re reasonably compliant. When the ATO starts looking elsewhere, and the focus starts moving to other taxpayers, the ground is more fertile.”

Mr Greco said better use of data analytics and data matching increased the risk for taxpayers doing the wrong thing.

“They’ve always had benchmarks on the cash part of the economy and anyone who operates outside the benchmarks attracts a red flag for a visit.

“With people moving to more digital transactions, it is becoming more difficult to hide and there’s a lot more tips-offs from the public.

“People are acting with their feet, and record numbers are picking up the phone on who might be doing what,” he said.

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