ATO extracts $127 million from cash economy

The Australian Taxation Office (ATO) extracted more than $127 million from the cash economy in just six months, according to Tax Commissioner Michael D’Ascenzo.

The Tax Commissioner has told a Sydney conference that a key area of the ATO’s compliance focus had been the cash economy, with the ATO’s strategies having yielded significant results for the community.

He said that from July 2009 to January 2010 more than $127 million in revenue had been raised, having the effect of protecting honest businesses from unfair competition.

Explaining the ATO’s approach, D’Ascenzo said a struggling business might show early signs of trouble by lodging late or increasing its debt.

“When we see this we contact the business and offer our assistance,” he said. “This financial year we have made over 5,500 assistance visits to businesses we identified as vulnerable, and are expecting to visit another 4,000 before the end of the financial year.”

D’Ascenzo said the ATO had also sent letters offering the opportunity to make a voluntary disclosure (and where appropriate, receive a reduction in penalty) to 17,000 small businesses it had identified as working in high-risk industries.

“This has already generated over 180 disclosures resulting in tax liabilities of over $400,000,” he said.