The Federal Budget 2012-2013 tax compliance measures will see the Tax Office continue its focus on shaking down non-compliance and non-disclosure of income, and means it will be chasing more people, more often and in real time, says Hall & Wilcox partner Andrew O’Bryan.
Mr O’Bryan said these tax compliance measures are also consistent with extending the funding for non-GST compliance which he says “is a good thing as there continues to be a high level of GST fraud which the Tax Office needs to address”.
He said people need to be careful in reviewing their tax affairs and to correct mistakes to avoid being targeted by the Tax Office.
Mr O’Bryan said people replicate mistakes particularly where it comes to private company loans under Division 7A, or when people treat profits as capital gains rather than ordinary income to get the 50% capital gains tax discount.
He said the Budget has also allocated almost $200 million to the Tax Office to extend it's crackdown on GST non-compliance, as well as a further $100 million to assist the Tax Office in managing outstanding tax debts.
“These GST compliance and debt collection measures are going to mean the Tax Office will be chasing more people more often. It also means that for non-complying tax payers, self-assessment is less available as we lead up to the 20th anniversary of self-assessment.
“High net worth individuals have to accept it’s likely that they will be reviewed at some stage, and they need to review what they have done.
“With corporate tax collections down, it’s not surprise that the Federal Government and Tax Office have gone down this path – they have to go for someone else,” Mr O’Bryan said.