ATO Outlines GST Black Holes

by Mary Swire, Tax-News.com, Hong Kong

25 February 2002

The Australian Taxation Office has revealed that eighteen months on from the introduction of the Goods and Services Tax (GST), non-compliance levels among Australian businesses are still high, with key 'black holes' being businesses selling assets without charging GST, and employees making use of business facilities upon which credits are later claimed.

Speaking to a Senate Estimates Committee last week the Deputy Commissioner for GST, Rick Matthews, explained that the worst offenders were building and construction firms, IT companies, freight firms, and the clothing and textiles industry. However, he admitted that there are some areas of GST non-compliance which are common to all industries.

He told the Estimates Committee that the ATO would be primarily focusing on the sale of businesses: 'There does seem to be a pretty unacceptable instance of businesses who've sold an asset but failed to charge GST on them so we are addressing that one,' he explained.

Another area of concern, according to the Deputy Commissioner, is the use by employees of company facilities. Businesses can claim a GST credit on expenses such as phone bills, stationery, and transport, but according to the ATO, it is proving difficult to ascertain exactly what proportion of expenses accrued by businesses are legitimate.

Mr Matthews revealed that audits conducted by the Tax Office over the last six months of 2001 had uncovered around $117 million in unpaid GST, although he said that it ws difficult to estimate the full extent of non-compliance.

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