Australians owe record levels of tax: commissioner
Australians are avoiding their tax responsibilities in record numbers.
The Australian Taxation Office (ATO) announced at a Senates Estimates hearing that the debt owed by Australians to the tax man has recently hit 45 billion Australian dollars (31 billion U.S. dollars), a record figure, according to the Australian Broadcasting Corporation (ABC) on Thursday.
As a result, the office was under significant pressure to recoup more revenue.
Tax Commissioner Chris Jordan told the Senate committee of the record debt levels on Wednesday.
The total figure included debts owed across all taxpayer categories including collectable debt, insolvency debt and debt subject to objection or appeal, which Jordan said would grow if the tax office did not move to collect money it felt was owed by taxpayers.
Collectable debt — that is debt owed by individuals, businesses and super funds — has now reached a record 26.6 billion Australian dollars (18.2 billion U.S. dollars), up from almost 24 billion Australian dollars (16.4 billion U.S. dollars) in 2017-18.
Within that figure, the majority of collectable debt is still owed by small business.
The ATO said that last financial year, 1.4 billion Australian dollars (958 million U.S. dollars) of debt was “uneconomical to pursue”, while 2.8 billion Australian dollars (1.9 billion U.S. dollars) was “irrecoverable at law.”
In its annual report, the ATO said it received 19,826 complaints in 2018/19, the majority of which related to income tax.
The group within the ATO charged with investigating large corporates and multinationals, the Tax Avoidance Taskforce, raised 1.9 billion Australian dollars (1.3 billion U.S. dollars) in liabilities and 1.1 billion Australian dollars (753 million U.S. dollars) in cash collections over the past year.
But the ATO had in some cases opted to settle with some large companies that disputed tax bills, rather than fight it out in court.
In the public group and multinational business line, the tax man settled with 98 companies in 2018-19. It had originally hit these companies with 3.5 billion Australian dollars (2.3 billion U.S. dollars) worth of tax bills. But it ended up collecting about 1.9 billion Australian dollars (1.3 billion U.S. dollars).