Australian Tax Office commissioner Chris Jordan said the largest part of that tax gap,accounting for about $12 billion,was in the small business area,including the “shadow economy”,which he estimated to be worth about $7 or $8 billion a year.
Jordan said the construction industry stood out for issues with tax gaps but it was a problem across the board with small businesses collecting taxes but not passing them on to the tax office,including Pay as You Go tax,or failing to pay superannuation.
Unpaid superannuation was worth $3.4 billion,as was unpaid Pay As You Go withholding tax.
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Data from the tax office’s 2019-20 annual report,the latest year for which there is data,showed for that financial year it collected just under 80 per cent of the fringe benefits tax that was owed,leaving it $991 million short.
The tobacco duty shortfall grew to 8.9 per cent,with the tax office owed $1.3 billion,and about 9.4 per cent or $629 million of the alcohol excise went unpaid.
In last week’s budget,the government committed $1.44 billion over the next four years to strengthen the tax office’s capabilities,including $1.1 billion for the tax avoidance taskforce which focuses on large businessesand multinational companies.