How the budget will affect Compliance …
$1bn ATO ‘sugar hit’ to tackle large corporates and high net wealth individuals
|Date of effect||From 2019-20|
The Government will provide $1bn over four years from 2019-20, including $6.5 million in capital funding, to the ATO to extend the operation of the Tax Avoidance Taskforce and to expand the Taskforce’s programs and market coverage. For this, the ATO is expected to produce a $3.6bn budget gain.
Tax avoidance schemes and strategies are the focus of this funding.
Recovering unpaid tax and superannuation liabilities
An additional $42m has been provided to the ATO to recover unpaid tax and superannuation liabilities focussed on larger businesses and high wealth individuals. The measure is expected to create a budget gain of $103.6m.
$607m to follow through on response to Banking Royal Commission
$606.7m will be spent over 5 years to follow through on the Government’s response to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. This includes:
- An industry funded compensation scheme of last resort for consumers and small business
- Additional funding for the Australian Financial Complaints Authority to establish a historical redress scheme for financial complaints dating back to 1 January 2008.
- Paying compensation owed to consumers and small businesses from legacy unpaid external dispute resolution determinations
- Additional funding for ASIC to implement its new enforcement strategy and expand its capabilities
- Additional funding for the APRA to strengthen its supervisory and enforcement activities and to fund a capability review of APRA
- Establishment of an independent financial regulator oversight authority
- Establishment of a Financial Services Reform Implementation Taskforce
These measures are partially offset by revenue received through ASIC’s industry funding model and increases in the APRA Financial Institutions Supervisory Levies.
ABN status stripped for non-compliance
|Date of effect||1 July 2021, and 1 July 2022|
From 1 July 2021, Australian Business Number (ABN) holders will be stripped of their ABNs if they fail to lodge their income tax return. In addition, from 1 July 2022, ABN holders will be required to annually confirm the accuracy of their details on the Australian Business Register.
Currently, ABN holders are able to retain their ABN regardless of whether they are meeting their income tax return lodgement obligations or the obligation to update their ABN details.
Support for small business in tax disputes
This previously announced measure provides $57m in funding over 5 years to provide access to a fast, low cost, independent review mechanism for small businesses in dispute with the ATO. The funding is directed to the Department of Jobs and Small Business, the Administrative Appeals Tribunal (AAT) and the Australian Taxation Office (ATO).
Sham contracting unit established
A new dedicated sham contracting unit will be created within the Fair Work Ombudsman. The unit’s role is to address sham contracting behaviour by some employers, particularly those who knowingly or recklessly misrepresent employment relationships as independent contracts to avoid statutory obligations and employment entitlement.
Registration scheme for Labour Hire operators
As previously announced, a National Labour Hire Registration Scheme will be established to protect vulnerable workers, including migrant workers. The Scheme will make it mandatory for labour hire operators in high risk sectors, such as horticulture, cleaning, meat processing and security sectors, to register with the Australian Government as a labour hire operator. Annual fees and charges to participate in the Scheme are anticipated to cover the cost.