ATO says 90% of small business income tax paid voluntarily
Australian Taxation Office (ATO) figures have revealed almost 90 per cent of income tax paid by small business is paid voluntary or with little intervention from the ATO, with the same percentage using a registered tax professional to help comply with their income tax obligations.
Deborah Jenkins, ATO deputy commissioner, said this showed the majority of small businesses in the tax system are trying to do the right thing.
“Small businesses make up more than 99 per cent of all Australian businesses. They contribute $380 billion to the economy each year and employ around five million people,” Jenkins said.
Jenkins said the ATO recognised the importance that tax professionals had in helping small businesses get their tax right.
“We’ve found that some small businesses are making mistakes with their tax, but these are often unintentional errors which are easily fixed,” Jenkins said.
“Our objective is to support these honest small businesses to better understand their obligations and to help them get it right the first time.”
The ATO’s research still showed a small percentage of businesses deliberately avoid their tax obligations and the ATO would be expanding their data analytical tool that spots red flags indicating omitted income or black economy conduct.
“Hiding income, exaggerating expenses and operating outside the system are all considered to be black economy behaviours. Businesses doing the wrong thing are about to attract our full attention,” Jenkins said.
AUTHOR
Chris Dastoor
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
