Tax dodgers who have lied or bent the truth on their tax returns are being blamed for costing the Federal Government a whopping $8.7 billion in just one year, according to a new report.
The Australian Tax Office (ATO) revealed the shocking figures n Thursday after calculating the ‘tax gap’, which is the difference between the amount of tax that should have been paid by individuals and the sum actually received, for the 2014-15 financial year.
Mistakes – whether deliberate or accidental – such as claiming private expenses, not declaring cash wages and claiming deductions where there is no link to income, all contributed to the problem, with the ATO revealing that 70 per cent of returns randomly selected for analysis included errors.
“Individuals are important contributors to our tax system. There are around 9.6 million individuals who are not in business and lodge tax returns. These taxpayers earn their income from salary and wages and investments,” Deputy Commissioner Alison Lendon said.
“What we have seen is that most people make small, but avoidable, errors so we will ramp up our assistance to help these people understand their obligations and get things right. But we are also asking people to take just a little extra care with what they claim, because all of those little amounts add up.
“A smaller number of people are deliberately doing the wrong thing – that has a significant impact on revenue. These people can expect closer attention from us, especially this tax time,”
Prime Minister Malcolm Turnbull also addressed the figures during a speech in Brisbane on Thursday and said that, while the government are committed to lowering taxes across the board, it is “crucial” that people pay what they owe.
He said: “I’ve seen that estimation and it’s up to the ATO to enforce tax laws. We are committed to lower taxes but it’s got to be fair. Paying tax is compulsory. It is crucial that everyone pays tax in accordance with the law.”
The ATO said they will use data and technology to identify such errors or false claims, as well as to auto-correct any obvious mistakes, tailor advice to individuals, streamline the reporting process and provide pre-fill information in tax returns.
“The Government announced additional funding in the 2018 Budget to support our efforts. This will allow us to continue to make lodging returns simpler for taxpayers and their agents by improving services and preventing errors,” Lendon added, “It will also see us ramp up our focus on higher-risk behaviours such as repeated and intentional non-compliance, fraud and deliberately taking positions contrary to law.”