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Aus Black Economy Taskforce Outlines Policy Options

by Mary Swire,, Hong Kong

02 August 2017

The taskforce charged with tackling the black economy in Australia is seeking feedback on proposed policy responses.

The Black Economy Taskforce was set up by Revenue Minister Kelly O'Dwyer in December 2016. It is chaired by Michael Andrew, former global head of KPMG and current chair of Australia's Board of Taxation. The Taskforce released its interim report in May 2017 and is expected to deliver its final report this October.

The document published this week contains 54 additional ideas that have been developed by the Taskforce since the interim report was completed. The options are not intended as recommendations, but, following a period of consultation, will instead inform the shape of the final report.

The Government defines the black economy as referring to "people who operate entirely outside the tax and regulatory system or who are known to the authorities but do not correctly report their tax obligations."

The following were among the issues identified in the latest publication:

  • The Australian Business Number (ABN) system could be reformed, and renamed the Australian Business Licence (ABL), under which a full licence would only be granted following the completion of financial literacy tests;
  • ABN holders could be required to be "fit and proper persons," and all businesses could be required to display a valid ABN;
  • The question of individual identity should be revisited, particularly in relation to the ownership of companies;
  • Know Your Client (KYC) tests could be strengthened;
  • The Taxable Payment Reporting System (TPRS), which requires contractor payments to be reported in some sectors, could be expanded into other sectors;
  • A new class of black economy-focused strict liability offences could be introduced;
  • A system of specialist tax tribunals could be introduced, to complement a new offence regime;
  • The Government could pursue greater international cooperation and exchange of information on issues such as the seizure of cash, beneficial ownership, and payroll compliance;
  • The Government could establish a single point of contact for serious black economy-related allegations;
  • Stronger incentives could be offered to whistle-blowers;
  • There could be a return to the practice of naming and shaming proven tax evaders; and
  • The anti-money laundering reporting regime could be broadened.

Commenting on the publication, O'Dwyer said: "The black economy is an insidious and wide-ranging problem which impacts many Australians. It not only harms those less able to protect themselves, it impacts and undermines those doing the right thing, who end up paying for those who don't."

She added: "The Government is committed to working to fight the black economy with a focus on improving fairness for businesses, levelling the playing field, and continuing to strengthen the integrity of our tax system."

A consultation on the policy options outlined by the Taskforce will close on August 14.

TAGS: compliance | tax | business | value added tax (VAT) | tax incentives | corporation tax | goods and services tax (GST) | Australia | payroll | tax reform | services | VAT compliance matters | Tax | Tax Evasion

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