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Continuing our theme of (put me to sleep?) summer holiday tax reading

Monday, January 14, 2019

Goodness. We had lots of people respond to our last news alert of (boring) summer tax reading. Large numbers of people downloaded our December submissions to Parliamentary and Treasury reviews of the Australian Taxation Office.

So we thought we’d enliven your summer reading even more! This time it’s the submission we made to Treasury in its review of Australian Business Numbers.

Over the last few years the ATO has been aggressively denying individuals access to ABNs and cancelling ABNs. There’s been an attitude that many people are not really running small businesses. The ATO reckons that it can identify a ‘real’ business from a ‘sham’ business.

We fought against this when the ATO denied a big group of work-from-home women their ABNs in late 2017. Well the wheels of bureaucracy grind slowly when the bureaucracy wants to grind slowly. Even though the ABNs have been restored, the issue for these women remains unsettled.

The government responded by asking Treasury to conduct a review. The Treasury discussion paper is balanced, recognising the issues and consequences of getting the policy wrong.

Our submission essentially argues that the ATO’s recent approach to ABNs is destructive of the intent of the tax collection system.

The system created in 2000 is supposed to operate to optimise ATO auditing through cross-referencing of ABNs, TFNs and bank account details. This auditing ‘net’ should have been capable of capturing data on legitimate business income and ‘red flagging’ unexplained income and wealth.

We argue that the ATO’s current approach:
  • threatens the integrity of the tax withholding system;
  • has become a trigger for expanded black economy activity;
  • is damaging job creation and job maintenance;
  • is pushing otherwise working people onto social welfare; and
  • is harming economic activity and Australian entrepreneurship.
We also say that there’s been something like hysteria on the issue created by the Black Economy Taskforce Report. This report presents a picture of a ‘crisis’ based on wrong data, bad assumptions, poor analysis and mythology.

Our submission is here [November 2018]

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