Hidden away in the Budget Paper No. 2, Part 1: Revenue Measures, the Government thinks contractors are dodging and not paying tax. So they will be introducing a matching system where payments made by the payer will be reported and matched to the income declared by the receiver.
Starts with the building industry from 1 July 2012, in the crosshairs are the contract cleaners, IT staff and bookkeepers.
Here's the section....
Tax compliance — reporting taxable payments
Revenue ($m)
| 2010‑11 | 2011‑12 | 2012‑13 | 2013‑14 | 2014‑15 | |
|---|---|---|---|---|---|
| Australian Taxation Office | ‑ | ‑ | 7.9 | 217.0 | 288.1 |
| Related expense ($m) | |||||
| Australian Taxation Office | ‑ | 3.6 | 8.8 | 17.2 | 15.4 |
| Department of the Treasury | ‑ | ‑ | 7.9 | 16.5 | 17.2 |
| Total | ‑ | 3.6 | 16.7 | 33.7 | 32.6 |
| Related capital ($m) | |||||
| Australian Taxation Office | ‑ | ‑ | 1.4 | ‑ | ‑ |
The Government will require certain businesses to report annually on payments made to contractors in the building and construction industry, with effect from 1 July 2012. The reporting regime will require businesses to report information that they should already collect under existing tax arrangements.
This measure, which will improve voluntary compliance, also includes an increase in funding for the Australian Taxation Office (ATO) of $46.4 million over the forward estimates period which will allow the ATO to undertake data matching, reviews of contractors' tax liabilities and targeted audits. The funding for the Australian Taxation Office will also be used to provide further assistance and education to industry. This will create a more level playing field for businesses and improve tax fairness within the building and construction industry.
This measure is expected to result in an additional $513.0 million in revenue over the forward estimates period. This amount includes $41.6 million over four years in underlying cash GST collections that will be paid to the States and Territories.
The Government will also consult publicly on options to introduce a similar reporting regime for payments to contractors in the commercial cleaning industry.
2 comments:
Glad you are back to blogging again. Thats interesting, you clearly are taking a close look at the Budget papers. I didn't realise this was such a big loop hole though. I guess lots of contractors are not even registered for GST.
Lilly, no more less for cash offers ;)
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