The Assistant Treasurer, Bill Shorten, today released for public consultation a discussion paper on the 2011-12 Budget measure to introduce a reporting regime for payments made to contractors in the building and construction industry.
"Consultation with industry is an important part of ensuring the reporting regime that we introduce balances the need to improve compliance with taxation obligations and the importance of keeping the compliance burden low,' Mr Shorten said.
"It is also an opportunity to address some misconceptions about the aims and requirements of the reporting regime.'
In broad terms, the reporting regime will require businesses in the building and construction industry to report annually to the Australian Taxation Office payments they have made to contractors in the building and construction industry. The regime will only require businesses to report information that they are already required to collect and record under the existing taxation law.
Importantly, the Budget measure will not introduce any new requirements for contractors to report payments made to them. Contractors will only be required to report on payments that they make to sub-contractors in the building and construction industry, and otherwise comply with existing obligations in respect of reporting of taxable income.
This measure is part of the Government's ongoing commitment to ensuring that compliant taxpayers are not disadvantaged by those taxpayers who are not paying their fair share of tax.
"The reporting regime will help honest contractors and businesses that are currently at a competitive disadvantage, compared to those contractors who fail to pay their fair share of tax. The introduction of a reporting regime will help to level the playing field within the building and construction industry, to the benefit of compliant contractors and businesses.'
The outcomes of this consultation will inform the drafting of regulations to introduce the reporting regime. Industry will also be invited to comment on the exposure draft regulations and draft explanatory materials at a later stage.
The outcomes of this consultation will also inform a further public consultation on options to introduce a similar reporting regime for payments to contractors in the commercial cleaning industry, to be conducted by the Government in 2011-12.
Consultation on the discussion paper will run for four weeks, closing on 27 June 2011.