ATO Gets More Money To Police Wealthy Taxpayers

by Mary Swire, Tax-News.com, London

15 May 2006

Commonwealth Treasurer Peter Costello has announced that the Australian Tax Office (ATO) will be furnished with additional resources in order to maintain tax compliance by high wealth individuals and their associated entities.

The ATO will be recieving $82 million in extra funding over the next four years to police wealthy individuals and implement measures that are expected to raise an additional A$615 million in tax revenues.

The number of Australia's high wealth individuals has tripled since the government established the HNWI Taskforce in 1997. The extra funding will allow the ATO’s High Wealth Individuals Taskforce to cover this increase in the number of high wealth individuals and enable the ATO to improve the timely identification of tax compliance risks. The ATO will undertake additional audit activity for all identified high risk cases, including closely-held private company groups.

Since it was established, the Taskforce has collected $1.3 billion from audits of high wealth individuals. Indications are that this activity has also improved voluntary compliance by this sector.

"This will help maintain confidence in the taxation system and enhance the equity of the tax system by ensuring that Australia’s wealthiest individuals pay their fair share of tax," Costello stated.

The additional funding is for the period 2006-07 to 2009-10. However, activity related to this initiative is expected to continue beyond this period.

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