Strengthening Australia’s Tax Integrity
Strengthening Australia’s Tax Integrity
Continuing a trend seen in previous budget announcements, the Government has once again increased funding for the ATO’s compliance programs.
Extension and expansion of tax compliance efforts
Tax Avoidance Taskforce
From 1 July 2025, the Government will commit $717.8 million over four years for a two-year expansion and a one-year extension of the Taskforce. Established in 2016, the Taskforce focuses on preventing, detecting, and addressing tax avoidance to ensure the largest and wealthiest taxpayers pay their fair share of tax in Australia. This expansion reinforces the ATO’s commitment to maintaining strong oversight of multinational enterprises and other large entities.
Shadow Economy Compliance Program
To combat shadow economy activities, including, but not limited to, labour exploitation, under-reporting of taxable income, and illicit imports, the Government has pledged $155.5 million to expand the Shadow Economy Compliance Program, supporting stronger enforcement, targeted investigations, and improved inter-agency data sharing and cooperation.
Personal Income Tax Compliance Program
The Government has committed $75.7 million to extend and expand the Personal Income Tax Compliance Program, an ATO initiative targeting non-compliance issues by individuals, such as overclaimed deductions and incorrect income reporting. The funding will support proactive, preventative, and corrective actions to improve tax compliance, enhance data-matching capabilities, increase audit activities, and strengthen taxpayer education to reduce errors and promote voluntary compliance.
Tax Integrity Program
Over three years from 1 July 2026, $50 million will be provided to extend the Tax Integrity Program, enabling the ATO to continue its engagement efforts with medium and large businesses, and wealthy individuals. The program focuses on improving compliance and ensuring timely payment of tax and superannuation liabilities through targeted oversight and early intervention.
Impacts on Tax Receipts
This measure is expected to increase government receipts by $3.2 billion and payments by $1.4 billion over five years from 2024–25. This includes $402.6 million in additional GST payments to states and territories and $31 million in unpaid superannuation to be disbursed to employees.
BDO comment
The Government's significant investment in the ATO’s tax compliance activities should be good news for honest taxpayers. By cracking down on tax avoidance and the shadow economy, these measures not only boost public confidence in the tax system but also mean a more transparent and equitable tax environment.
However, we fear that these additional resources could lead to a further burdensome compliance framework that imposes costs on taxpayers who are compliant with their tax obligations.