Australian Bonus Encourages Lodging Of Tax Returns

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

19 October 2009

Australia’s Assistant Treasurer, Nick Sherry, has announced that the government's tax bonus payment appears to have had an important side-benefit by boosting the number of taxpayers who have lodged tax returns.

The tax bonus was introduced as part of the government’s economic stimulus package. It provided for payments of AUD900 (USD820) if a person’s taxable income was up to and including AUD80,000; AUD600 if taxable income was between AUD80,001 and AUD90,000; and AUD250 if taxable income was between AUD90,001 and AUD100,000. To be eligible, taxpayers had to lodge their 2007-08 tax returns by June 30, 2009, unless the Australian Taxation Office (ATO) had granted a deferred lodgement date.

Based on pre-tax bonus data, the Inspector General of Taxation found a non-lodgement rate of tax returns of 9.35%. However, using the latest data, the ATO now estimates only 4% of Australians have outstanding non-lodged tax returns. The latest ATO analysis has found that as at June 30, 2009, 12.5m 2007-08 returns had been lodged. This compared to 11.7m lodgements expected by the ATO for that year, before the announcement of the tax bonus.

"The tax bonus has almost single-handedly cut the number of outstanding tax returns by more than half," said Sherry. "ATO estimates an extra 800,000 taxpayers lodged returns before the June 2009 deadline to be eligible for the tax bonus."

"Tidying up important issues such as the lodgement of personal income tax returns ensures we have as clean a slate as possible for consideration of the outcomes of the Australia's Future Tax System review," he added.

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