Thousands of tradesmen are allegedly using a loophole in the Australian tax system where they quote hardware chain Bunnings’ Australian Business Number on invoices instead of their own.
The alleged fraud is costing the government hundreds of millions of dollars each year, The Australian reports.
It's been revealed that thousands of tradesmen are allegedly getting an invoice from the hardware chain and then using the ABN - a scheme introduced in 2000 - on that for their own invoices to their customers.
Treasury's black economy taskforce chairman, Michael Andrew, told the Australian the 17-year-old ABN regime is "not working".
“We found out that more than 40 per cent of ABNs quoted in the Northern Territory were Bunnings,” Mr Andrew said.
“Of course, every tradesman goes to Bunnings. They get an invoice — the ABN’s up top.”
Mr Andrew went on to explain that the alleged fraud occurs when you ask for an invoice, or valid receipt.
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The name of the company appears up the top of the invoice but the ABN is someone else's.
In these cases, it's a Bunnings ABN.
"The result of which (is) you can’t trace then where the money really went," he said.
In other words, it's blocking the tax office from keeping track of tradies' income.
There's no suggestion Bunnings has done anything wrong in this case, but the company now has one of the most quoted ABNs in the country.
On Wednesday, CPA Australia’s policy boss Paul Drum will submit to the government that the ABN system “is in serious and urgent need of an overhaul".
Mr Drum said in an interview, that also involved Mr Andrew, that the "ABN system is not working".
“We have 3.5 million ABNs who have never lodged a tax statement or a tax return," he said.
These revelations come just one day after advocacy groups slammed a proposal to strip consumers of their legal protections if they pay in cash and fail to get a receipt.
The proposal was one of 35 recommendations contained in a report from the taskforce as it attempts to close an estimated $40 billion black hole in the economy.
The black economy taskforce is due to deliver its final findings to the government by October.
Bunnings declined to comment about the situation when contacted by Seven News Online.