The tax man set its sights on getting back some of the tax money lost to Australia’s ‘black economy’, that is, the segment of its economic activities that aren’t exactly accounted for by the country’s regulations regarding taxations, with the focus aimed towards small businesses in the country
Small businesses across the country were forced to get their Audit Shield in order, when the ATO began to focus on small businesses on their crackdown to get back a portion of the $23 B lost to the ‘black economy’.
Officers from the Australian Taxation Office (ATO), went and visited over 400 small business ventures across the Perth and Canberra region over the time span of April as part of their campaign regarding the ‘black economy’ which they presented to the public as helping small business get their tax affairs in order.
The ATO officers went and collected data during their visits, data which, according to an ATO spokesperson, may be later used for audit purposes if businesses are caught engaging in undesirable behavior.
The spokesperson added that local visits and interaction with the ATO provided the small businesses with some much needed knowledge regarding proper registration, maintaining accurate business records, and other taxation-related processes.
The Assistant Commissioner for the ATO, Tom Wheeler, also made a statement regarding the visits, saying that the ATO focused on the businesses operating in the cash and hidden economy, in order to ensure fairness and impartiality for both the businesses and their respective communities. He says that the focus was restaurants, cafés, and such small businesses in order to ensure up-to-date registration info. He adds that these businesses are the focus because of how they have such ready and open access to cash, and that is a notable risk indicator for the ATO.
According to ATO, 45% of restaurant, cafe and similar businesses are potentially cash only with 14% reporting amounts with a notable deviation from the industry’s benchmark, whilst for the hair and beauty industry, 58% are potentially cash only, with 10% reporting similar extreme deviation from benchmarks. The two sectors are second and third, respectively, in the number of community reports regarding potential tax evasion, behind the construction industry.
Mr. Wheeler adds that the visits weren’t just about seeing if the businesses had been doing something wrong, but also to ensure that they were handling their obligations correctly, and, if not, how the ATO can support these businesses.
Chief Executive for the Council of Small Business of Australia, Peter Strong, made a statement prior to the visits, reassuring small business owners in the country that only those who were doing something wrong would have any problems with the ATO. He adds that for those who are worried about the ATO, it pays to talk to an accountant, maybe discuss Audit Shield, and get the facts straight.