(Australian Associated Press)
Businesses doing cash deals are costing the community up to $50 billion in unpaid taxes, the Australian Taxation Office has revealed.
More than 60,000 businesses have failed to lodge returns under the taxable payments reporting system for 2019/20, contributing to a budget black hole of almost three per cent of Australia’s annual gross domestic product.
The system is a black economy measure designed to identify contractors, particularly in the construction industry, who don’t report or under-report their income.
The black economy refers to those operating entirely outside the tax system who fail to report taxable income by understating takings or accepting cash ‘off-the-books’ payments.
The ATO estimates about 280,000 businesses need to lodge a taxable payments annual report for 2019/20.
Businesses who have not yet lodged need to lodge as soon as possible, to avoid penalties as forms were due to be lodged by 28 August, 2020, and are overdue.
ATO assistant commissioner Peter Holt says it’s not just businesses that pay contractors in the building and construction industry, with some firms not realising they need to lodge an annual report – depending on payments received for deliveries or courier services.
“Many restaurants, cafes, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers,” Mr Holt said.
“These businesses may not have previously needed to lodge a (report). However, if the total payments received for these deliveries or courier services are 10 per cent or more of the total annual business income, you’ll need to lodge.”