Small businesses pay 10 billion Australian dollars in young taxes. (photo by Australian Financial Review)
Small businesses pay as much as A $10 billion a year in taxes, with the most problematic credits, according to a new analysis by the Australian Inland Revenue Authority (ATO).
According to the Australian Financial Review, prior to the release of the latest tax gap data in 2019, Chief of Inland Revenue Jordan (Chris Jordan) said that in percentage terms, small businesses were expected to have the largest tax gap. More than A $8.7 billion for wage earners and A $2.5 billion for large businesses.
At yesterday`s annual meeting of the tax Institute`s (Tax Institute), Jordan said operators would be subject to rigorous new scrutiny to reduce problematic tax returns, which account for 10 percent to 15 percent of small business revenues.
It is reported that the tax gap caused by the 9.6 million individual taxpayers, accounting for 6.4 percent of the total tax base, is higher than the 5.4 percent share of large companies.
Jordan said IRD staff will step up on-site visits to "cash-only" companies and increase scrutiny through data analysis.
The so-called "tax gap" measures the difference between the amount of tax a taxpayer should pay to meet his or her full tax obligations and the actual amount of tax paid.
Jordan also revealed a new plan to crack down on tax credits on the rental property market, and nearly 90 percent of the claims were found to be incorrect.
"We have found that the interest (deduction) declaration on investment loans is incorrect, that is, that the property has sublent (Refinance), for private purposes or that (Capital Works) credit for asset works has been erroneously included in the category of declaration of maintenance and maintenance expenses. At the same time, taxpayers will not be able to apportion tax credits on holiday homes without a real rental home, "he said.
"when you take into account that 2.1 million taxpayers have declared a $47.4 billion tax credit and you report only A $44.1 billion in revenue, you know the potential tax risk."
