The Government will continue its commitment to strengthen the economy by focusing on improving its integrity measures to create a fairer level-playing field for all.
Funding New ATO Enforcement
Additional funds will be allocated from the Budget over four years to fund a new ATO enforcement strategy to tackle the Black Economy. Through this measure, the ATO will implement new mobile strike teams, stricter auditing and a Black Economy and illegal phoenix activities.
Cash Payment Limit
The Government will commence with a restriction on cash payments made to businesses for goods or services of up to $10,000 from 1 July 2019. Payments over $10,000 must be made via an online banking system or cheques unless payments are with financial institutions or consumer to consumer non-business transactions.
No Tax-Deductibility for Non-Compliant Payments
From 1 July 2019, the Government is keeping a closer eye on those businesses that try to claim deductions for any payments made to their employees that do not comply with current regulations. Deductions for payments from a business to a contractor will also be disallowed if the contractor does not have an ABN and the business does not withhold and PAYG monies, despite the withholding requirements applying.
Reforms to Combat Illegal Phoenixing
Corporations and tax laws will be strengthened with further measures to prevent illegal phoenix activities. Those measures will include changes to:
- introduce new phoenix offences for individuals who run or open the door to illegal phoenixing;
- stop directors incorrectly backdating resignations to avoid liability or prosecution;
- control the power of related creditors to vote on the appointment, removal o replacement of an external administrator;
- expand the Director Penalty Regime to GST, luxury car tax and wine equalisation tax (to make directors personally liable for company’s debts);
- allow the Tax Office to restrict refunds for outstanding tax lodgements.
Personal Income Tax
The ATO will receive further funding from 1 July 2018 in a bid to strengthen compliance activities on individual taxpayers and their tax agents. This funding is set to provide new compliance activities, a stronger audit presence and prosecutions, improve education and guidance materials, pre-filling of income tax returns and enhance real time messaging to tax agents and individual taxpayers. This measure is set to prevent over-claiming of any entitlements, including tax deductions by higher risk taxpayers and their agents.