Thousands of Australians have been reported for dodgy tax behavior and those in the building and construction industry top the list.
Australians across the country made a total of 43,000 tips to the Australian Taxation Office (ATO) in the 2021-22 financial year, with businesses, customers, employees and members of the public picking up the phone to report alleged offenders
Hairdressing and beauty services came second on the list, followed by cafes and restaurants, road haulage and management advice and related consultancy.
More than 13,400 calls were made to the ATO in the state, followed closely by Victoria, 11,500, and Queensland, 9,200.
While Sydney residents were the main culprits, Australians in regional locations were also exposing their alleged local thieves.
The Sunshine Coast Hinterland and Cairns in Queensland, Wellington in Sydney and Wodonga and the Mornington Peninsula in Victoria were the top five regional locations for tips – almost 7,000 calls from people outside the big cities.
IconATO Assistant Commissioner of Camera Peter Holt warns tax evaders as thousands of Australians report dodgy businesses. Steve Tanner Credit: Provided
Examples of dodgy businesses include companies that asked customers for cash or offered a cash discount, paid workers “cash on hand,” failed to report all sales, failed to provide pay slips to workers, or even ran software illegal that modifies sales transactions.
The ATO is currently using information intelligence to tackle the ‘shadow economy’, which is estimated to skim $11 billion off the top of our taxes every year.
ATO Assistant Commissioner Peter Holt said that while the past few years had been tough for businesses, that did not excuse this type of behaviour.
“The underground economy is an economic and social issue that affects us all,” Holt said.
“As businesses recover from the impacts of COVID and natural disasters, it’s more important than ever to protect the vast majority of businesses that are honest and trying to do the right thing.”
Holt said the fraudulent behavior had put more pressure on community services.
“Every tax dollar dodged is a dollar that can’t be used for vital services like health and senior care,” he said.
“We have all witnessed over the past two years how much the community depends on these critical services.”
Camera icon. Commander of investigations. Eastern Command Kirsty Schofield was part of a joint agency investigation into elaborate tax fraud that led to charges against 12 people on Australia’s east coast in 2021. Richard Dobson Credit: The Courier-Mail
The deputy commissioner, however, said the ATO was not just investigating companies.
“We know that many customers also demand to pay in cash and ask for discounts to avoid paying tax, and we also know that many workers demand cash, especially where there is a labor shortage,” he said.
“Our message is that regardless of which party is driving the behavior, it’s illegal and we are.”
More than ninety percent of the tips received were deemed worthy of further investigation or withheld for intelligence purposes, Holt reported, adding that the community’s assistance in identifying thieves was “intel valuable intelligence”.
“Sometimes that warning can be the final piece of the puzzle that we need to act on,” he said.
While the tax expert confirmed that digital payments have increased in popularity due to COVID-19, he said the shadow economy has not stagnated.
“Just because digital payments have grown in popularity, that doesn’t mean the shadow or cash economy has disappeared, it’s still there and we’re determined to shine a light on it,” he said.
“It’s about keeping the playing field as level as possible.”
The ATO confirmed it has also received a number of reports as part of Operation Protego, which is investigating a major fraud in which participants make up bogus businesses to claim bogus refunds.
Tips, which can be made anonymously, can also be submitted online at ato.gov.au/TipOff, using the ATO app or by calling 1800 060 062.