ATO heads to western Sydney following spike in dob-ins about black economy behaviour

The Australian Taxation Office (ATO) has announced it will visit 400 businesses in western Sydney in November as part of its work to tackle the black economy and protect honest businesses from unfair competition.

“We’ve seen a spike in tip-offs about businesses in Bankstown paying their workers in cash and not withholding tax or paying super. This is simply not on and it’s not fair for those honest businesses who are doing the right thing as well as the employees who are missing out on their super,” assistant commissioner Peter Holt said.

The ATO has also received intelligence that some Bankstown businesses have refused to provide tax invoices for sales, are underreporting income and not reporting sales to the ATO.

“Certain industries are on our radar in Bankstown, including cafes, restaurants and takeaway food services, transport businesses, building completion businesses, delivery businesses, and businesses providing cleaning, pest control and gardening services,” Mr Holt said.

Businesses who are not declaring income, not complying with their tax and super obligations or underpaying workers are contributing to the black economy.

“The Black Economy Taskforce estimates that the black economy is costing the community as much as $50 billion, which is approximately 3 per cent of gross domestic product (GDP),” Mr Holt said.

“This is money that the community is missing out on for vital public services like hospitals, roads, welfare and schools.”

The ATO said its upcoming visits in Bankstown are also about protecting honest businesses by ensuring all businesses are playing fair and competing on a level playing field.

“There are significant numbers of businesses in Bankstown with more than two years of overdue income tax returns as well as large numbers of business activity statements outstanding, which is a concern to us,” Mr Holt said.

During the visits, the ATO will also be running some information sessions tailored to support small businesses.

“During the visits, we may discuss record-keeping and payment facilities, outstanding lodgments, tax debts and managing employee entitlements such as superannuation,” Mr Holt said.

The ATO will also be visiting tax practitioners of small businesses in these areas as part of its early intervention strategy.