Committing to using renewable energies and reducing waste in order to become more environmentally sustainable is becoming more and more popular amongst businesses, arguably largely pushed by a demand by consumers and climate change concerns. Most recently, it is the Japenses brewing and spirits giant – Asahi – which has joined other brewers, Lion and Read More…
Australians over-claim $8.7 billion in tax
Fri 13 July 2018 - 1:06 pmNews
Australians over-claiming on their tax returns took almost $9 billion out of the federal government’s budget in just one financial year.
The Australian Taxation Office has published an estimate of the tax it collects and the amount that would have been collected if individuals fully obeyed the law.
While 93 per cent of income tax from individuals is paid voluntarily, the amount the government missed out on in 2014/15 was 6.4 per cent – about $8.7 billion.
Prime Minister Malcolm Turnbull said it was critical individuals and businesses paid their fair share.
“We’re in favour of lower taxes but – and this is a big ‘but’ – paying taxes is compulsory,” Mr Turnbull told reporters in Queensland.
“We don’t believe in a self-help approach to tax reform.”
There are around 9.6 million individuals who are not in business and lodge tax returns.
The tax gap for individuals not in business is primarily driven by incorrectly claimed work-related expenses.
Common mistakes include claiming deductions where there is no connection to income, claims for private expenses, or no records to show that an expense was incurred.
Other areas of concern include high rates of incorrect claims for rental property expenses and non-reporting of cash wages.
“Seven out of 10 returns randomly selected for review had one or more errors,” ATO Deputy Commissioner Alison Lendon said.
“What we have seen is that most people make small, but avoidable, errors.
“We are also asking people to take just a little extra care with what they claim because all of those little amounts add up.”
Lendon said people deliberately doing the wrong thing can expect closer attention during tax time, with the ATO using data and technology to verify tax claims.
The amount of company tax estimated to be lost in 2014/15 was $2.5 billion, about 5.8 per cent of the total.
“The ATO will continue to focus on multinationals and large corporates, where in the last three years we have already made substantial progress from a strong base,” Lendon said.
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