This article was written by Sam Duncan and Amber Hu.
The Government continues to broaden the tax integrity measures announced in the previous budget and target the black economy. In addition to the measures addressed elsewhere in this alert, the following measures form part of the overall tax integrity package.
Broadening contractor compliance
From 1 July 2018, the Government will extend the Taxable Payments Reporting System (TPRS) beyond the building and construction industry to target payments to contractors in the courier and cleaning sectors. Businesses in these industries will be required to report payments they make to contractors (individual and total for the year) to the ATO. The first annual report will be required in August 2019.
Prohibition on sales suppression software
The Government will prohibit the manufacture, distribution, possession, use or sale of sales suppression technology and software, which allow businesses to understate their incomes by untraceably deleting selected transactions from electronic records in point of sale (POS) equipment. The prohibition will have effect from the date of Royal Assent of the enabling legislation.
Targeting Australia's black economy
Following the establishment of a Black Economy Taskforce in December 2016 and the release of Taskforce's interim report in March 2017, the Government has announced a one year funding extension for the Taskforce's audit and compliance activities. An additional $32 million will be provided to the ATO to better target black economy risks. The Taskforce will continue to target non-lodgement, omission of income and non-payment of employer obligations by small and medium-sized businesses.
The Black Economy Taskforce's final report is expected to be delivered in October 2017.
Additional funding for addressing serious and organised crime in the tax system
To enable the ATO to continue compliance work against serious and organised crime in the tax system, the Government will provide the ATO with $28.2 million in funding.
For a full analysis of this year's Budget measures, please see Australian Federal Budget 2017-18.