Tax office scrutiny of the so-called ‘black economy’ will be extended to the road freight, security and information technology sectors.
It’s estimated the portion of the Australian economy which does not comply with tax law and other regulations could be worth as much as three per cent of GDP in 2017 or $50 billion a year.
The Turnbull government on Monday released draft laws which extend an initial crackdown on the building and construction, courier and cleaning industries to three other sectors.
Payments made to contractors by road freight, security and information technology entities will have to be reported to the Australian Taxation Office via the taxable payment reporting system.
It’s expected the extra scrutiny from July 1 next year will deliver almost $550 million into government coffers to 2021/22.
‘The black economy is a threat to the livelihoods of honest Australians,’ Revenue Minister Kelly O’Dwyer said.
‘Honest businesses meeting their tax and other obligations lose out to competitors doing the wrong thing and this encourages others to begin operating in the black economy in order to remain competitive.’
A second measure will remove tax deductibility for certain payments – including payment of wages and payments to contractors – if the entity making the payment fails to comply with its obligations to the tax office.
IT companies covered by the laws include technical support, web design, hardware consulting, software development, computer programming and computer facilities management.