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ATO warning as $33.5 billion missing

·Personal Finance Editor
·2-min read
The Australian Taxation Office (ATO) letter head and a person holding $100 notes
The ATO said billions of dollars are missing in an apparent tax gap. (Source: Getty)

The Australian Taxation Office (ATO) said while the nation’s tax and super system were in good shape, there were billions of dollars missing in an apparent “tax gap”.

ATO second commissioner, client engagement group, Jeremy Hirschhorn said the most recent estimates from the ATO showed the country was around 93 per cent tax compliant.

Hirschhorn said 91 per cent were compliant at tax time, with a further 2 per cent meeting expectations after the ATO launched compliance action.

However, Hirschhorn said the 2 per cent amounted to around $10 billion, with $33.5 billion missing altogether.

“Our tax-performance program helps us understand the different markets and where we should focus our efforts,” Hirschhorn said.

“Our aspiration is to improve tax performance by continuing to improve voluntary compliance.”

Hirschhorn said that, pleasingly, the ATO had done a good job at holding large companies to account, adding that they were only responsible for around $2 to $3 billion of the total tax gap.

However, this means the remaining missing funds are due to small businesses and individuals.

Where is the missing money?

Hirschhorn said a major issue when it came to small businesses that operate in the “shadow economy”, meaning they don’t report their income from legal or illegal practices.

Hirschhorn said the ATO was focused on bringing those businesses into the system so they could be held accountable.

Small businesses account for $15 billion of the $33.5 billion missing.

Regarding individuals, the ATO said it was watching out for those who over-claimed, particularly when it came to work-related expenses.

The ATO also said it was keeping a close eye on Aussies who held property investments as well as those who invest in cryptocurrencies.

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