ATO's major tax return change as $8.3 billion goes missing

Lucy Dean
·2-min read
A stock photo of the Australian Tax forms.
Have you filed your tax return? Image: Getty

The Australian Tax Office (ATO) is using data from short-term rental platforms and cryptocurrency sales to crack down on tax cheats, as it reports $8.3 billion in missed tax revenue from individuals.

The ATO released its latest tax snapshot on Monday, showing it received 93 per cent of what it had expected to receive over 2017-18, across all taxpayers including businesses, individuals and corporations.

It estimates there was a shortfall of around $8.3 billion from individual taxpayers, not including Australia’s high-net wealth individuals, who posted a tax payment gap of $808 million.

“The individual tax gap... shows that our strategies and approaches are starting to take effect, as the gap has declined,” the ATO said in its report.

“However, it is important to note that a small amount of overclaiming across a large population does add up to a significant amount and that this area requires continued focus.”

New focus on cutting the gap

The ATO said it’s now focused on helping taxpayers spot errors in their tax returns before they file them by pre-filling certain elements of their tax returns.

“In 2019–20, we collected data on taxpayers who acquired and disposed of cryptocurrency and, through our pre-fill service, we used this data to remind them of their obligations to report income from these transactions,” the ATO said.

Additionally, the ATO said it collected data from short-term rental platforms and “used this to better understand the use of online platforms and whether taxpayers are reporting their income correctly”.

As more Australians work from home, the ATO said it’s continuing to trial new data sets to manage common errors in tracking work-related expenses and rental claims.

And it’s begun sending some taxpayers notice before they file their returns that they will need to provide substantiation to support their claims when they do lodge them.

“The pilot showed improved accuracy of work-related expense claims and reduced stress on taxpayers about expected contact from the ATO following up on their claims.”

The ATO said these pilots, along with others helping taxpayers pay their tax bills, have highlighted whether someone’s error was accidental or deliberate.

The tax office will also scrutinise claims from JobKeeper and JobSeeker recipients, warning that those income streams need to be included in their returns.

Australians have until 31 October to complete their 2020 tax returns, unless they have registered with an accountant.

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