The Government has included measures to strengthen the fairness and sustainability of the tax system, which is expected to improve the budget by $3.1 billion over five years. This includes funding for the ATO to address fraud, extending tax compliance activities focused on domestic and multinational tax avoidance, and strengthening the foreign resident capital gains tax regime.
Compliance programs
Australian Taxation Office Counter Fraud Strategy
The Government will provide $187.0 million over four years from 1 July 2024 to strengthen the ATO’s ability to detect, prevent and mitigate fraud against the tax and superannuation systems. Funding includes:
- $83.5 million for a new compliance taskforce to recover lost revenue;
- $78.7 million for upgrades to information and communications technologies to enable the ATO to identify and block suspicious activity in real time; and
- $24.8 million to improve the ATO’s management and governance of its counter-fraud activities, including improving how the ATO assists individuals harmed by fraud.
This measure is estimated to increase receipts by $302.2 million and increase payments by $187.4 million over the 5 years from 2023–24.
Shadow Economy Compliance Program
The Government will extend the ATO Shadow Economy Compliance Program for two years from 1 July 2026. This will enable the ATO to continue to reduce shadow economy activity, thereby protecting revenue and preventing non-compliant businesses from undercutting competition.
This measure is estimated to increase receipts by $1.9 billion and increase payments by $610.2 million over the 5 years from 2023–24. This includes an increase in GST payments to the states and territories of $429.6 million.
Tax Avoidance Taskforce
The Government will extend the ATO Tax Avoidance Taskforce for two years from 1 July 2026. This will ensure the ATO continues to be well-resourced to pursue key tax avoidance risks, with a focus on multinationals, large public and private businesses, and high-wealth individuals.
This measure is estimated to increase receipts by $2.4 billion and increase payments by $1.2 billion over the 5 years from 2023–24.
Personal Income Tax Compliance Program
As discussed in the Personal Tax Section below, the Government will extend the ATO Personal Income Tax Compliance Program for one year from 1 July 2027. This extension will enable the ATO to continue to deliver a combination of proactive, preventative and corrective activities in key areas of non-compliance as well as emerging risks.
Other regulatory updates
Abolishing nuisance tariffs
The Government will abolish 457 ‘nuisance’ tariffs from 1 July 2024 at a cost of $41.0 million over five years. This amendment will boost productivity, reduce red tape and simplify the tariff system. It will streamline approximately $8.5 billion in trade, saving Australian businesses approximately $30 million per year in compliance costs.
Instant asset write-off
As discussed in the Small Business Section below, the Government is extending the $20,000 instant asset write-off by 12 months until 30 June 2025 to improve cash flow and reduce compliance costs for small businesses.
