A welcome approach to cost-cutting outlined in the budget was to take money from lawbreakers rather than honest taxpayers — although the moves aren’t without consequence for business owners.
Speaking on the need to balance tax cuts with deriving legitimate tax revenues, Treasurer Scott Morrison outlined a range of initiatives — some of which had previously been announced — to crackdown on beneficiaries of the so-called black economy.
“We also need to shine a light on the black economy. Taxes should be lower, simpler and fairer, but taxes must also be paid,” the Treasurer said.
“Honest and fair businesses and taxpayers are being ripped off by those who think they are above paying tax. In response we will be implementing the recommendations of our Black Economy Taskforce, targeting sectors where there is higher risk of under reporting of income. This is expected to bring in $5.3 billion over the next four years.”
As part of these measures, the government will ban the use of cash for payments greater than $10,000. This would include the purchase of vehicles, payment of property deposits and settling large invoices on commercial contracts.
Paul Drum from accounting body CPA Australia also noted that “there are to be tougher rules for illegal phoenixing activities, including increased liabilities for directors”, and that “the ATO will receive additional funding to ramp up its debt collection activities for both tax and super liabilities”.
Mr Morrison claimed that the crackdown will level the playing field for honest taxpayers and hinder criminal activities.
“It will be bad news for criminal gangs, terrorists and those who are just trying to cheat on their tax or get a discount for letting someone else cheat on their tax,” he said.
Reckon ANZ’s managing director, Sam Allert, said businesses should applaud the government’s move to break the power of the black economy.
“This will certainly help in levelling the playing field for small businesses,” said Mr Allert.
“If we can reduce the black economy or tax evasion then everyone benefits. If everyone, including big business like global companies who move money offshore, all paid the correct and fair tax then we would be able to reduce tax rates, and offer many more incentives for small- and medium-sized businesses.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
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