Estimates of the size of the black economy exaggerate the extent of tax avoidance in Australia, the Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, said today.
"The figures are inconsistent with previous predictions. The 2001 Australian Bureau of Statistics study estimated the cash economy at under 2.0% of GDP," Senator Coonan said.
"The reality is that no effective measure of the black economy exists anywhere in the world."
"However, the fact is that $2.6 billion in extra revenue has been raised for the benefit of the Australian community since the introduction of the new Tax System (NTS), which requires businesses to register with the Australian Tax Office (ATO) in order to claim refunds of the GST on their inputs," Senator Coonan said.
"Under the NTS, $100 million has been withheld from businesses not quoting an ABN."
Senator Coonan said that 3.7 million businesses and organisations registered for ABNs with the ATO. This is up from the original Government estimate of 2.1 million.
"No Government can legislate for honesty, but the ATO is vigilant in scrutinising the economy with 3000 dedicated officers in a program to annually visit 20,000 businesses and ensure they are properly registered and meet their tax obligations," Senator Coonan said.
The requirements for the registration are making the tax system fairer for the vast majority of Australian businesses and people who pay their tax on time.
"The Government remains committed to ensuring the tax system meets its objectives," Senator Coonan said.
Media Contact: Bob Lawrence 0438 690 305