Profitable companies that choose to relegate their tax and super obligations will be a focus of the ATO’s crackdown on collectable debt, Commissioner says.
Too many businesses “roll the dice” on tax liabilities and treat them like a free loan, ATO Commissioner Chris Jordan says.
He said small business owed more than its share of collectable debt and a rising number of profitable businesses with the capacity to pay were choosing not to.
Speaking at the Tax Institute Summit in Melbourne this morning with six months left of his tenure, Mr Jordan was “unapologetic” about the ATO’s tougher stance on collectable debt and called upon tax professionals to help.
“Most collectable debt is self-assessed. It includes GST a business has collected and received credits for but hasn’t remitted. It includes unpaid pay-as-you go withholding and superannuation guarantee charge that has a direct impact on employees.”
“Small businesses continue to be over-represented in our debt book, owing over $33 billion of the $50.2 billion of collectable debt – $23 billion of that is unpaid business activity statement debt.”
“There are a growing number of profitable businesses who have the capacity to pay their bills but are choosing not to. Businesses appear to be deprioritising payment of tax and super.”
“This needs to stop.”
“We are hearing more and more from tax professionals that some businesses are rolling the dice, treating ATO liabilities like a free loan.”
“This is not acceptable.”
“I am calling on the tax profession for support. You can reinforce to your clients they are only the temporary custodians of GST, pay-as-you-go withholding and super guarantee – it’s not theirs.”
He said another focus in his final six months was deliberate fraud, “which is nothing more than theft from the community” and the integrity of the tax system in the light of “recent events”.
“In response to increasing fraud attempts, we are embedding fraud prevention methods into our systems and increasing our detection capabilities,” he said.
“We have bolstered the number of our people focused squarely on tackling fraud attempts. We have established the Fraud and Criminal Behaviours Group with 500 dedicated staff on the case.”
“Integrity is also front and centre for us. I welcome and support any actions that strengthen the integrity of the tax system. Particularly further review and consideration of current limitations within tax secrecy laws and our investigative powers.”
“Integrity matters and the public’s desire for integrity in the tax profession is likely to only increase. Recent events are a reminder of the important and trusted role all advisers have and the important role we all play in building trust and confidence in the system.”
06 September 2023