Reforms to tax compliance

12 May 2011

The Australian Government has announced a package of tax compliance reforms it says is designed to create a more level playing field for taxpayers that ensures they pay their fair share of tax.

So what are the reforms and what are they meant to achieve?

Reporting taxable payments

There are two parts of to the reporting of taxable payment reforms, particularly aimed at improving compliance with tax obligations by contractors.

This particularly affects the building and construction industry. Businesses operating in this industry will be required to report to the ATO annually on payments made to contractors in the industry, along with the contractors ABN from 1 July 2012.

This will allow data matching to provide information for review, targeted audits or further assistance and education.

The Government will also undertake public consultation during 2011/12 to examine a similar scheme for the commercial cleaning industry.

Enhanced fraud detection and management

The ATO will be focusing on tax refund fraud, following evidence that the system of tax refunds has been abused by some tax payers.

The Government will be providing additional funding to the ATO for a number of programs that will allow the ATO to educate businesses, undertake enforcement activities, improve intelligence and detection models.

Reporting on Government Grants and Payments

The ATO will be monitoring and collecting payment information from government agencies across local, state and Federal levels to develop a more sophisticated data-matching capacity to examine and enforce compliance by organisations that receive Government grands and payments.

More information

2011/12 Budget (PDF)

The nip n tuck budget

Cutting back Government allowances and spending on incentives

Budget winners and losers

Economic overview