The Turnbull Government is committed to tackling the black economy and has today issued a consultation paper inviting comment on its Budget announcement to introduce an economy-wide cash payment limit of $10,000.
The Minister for Revenue and Financial Services, the Hon Kelly O'Dwyer MP said the cash payment limit is one of many measures announced in the Federal Budget to ensure that Australians receive a fair go and that illegal black economy behaviour is stopped in its tracks.
These measures build on the Turnbull Government's strong action to combat multinational tax avoidance, including through the introduction of the Multinational Anti-Avoidance Law (MAAL), the Diverted Profits Tax, and Country-by-Country reporting.
The Multinational Anti-Avoidance Law alone has seen additional sales of $7 billion each and every year returned to Australia and hundreds of millions of dollars of additional GST revenue being paid. It has also seen social media giant Facebook, as well as more than 40 other multinational entities restructure their arrangements to comply with the MAAL.
It is proposed that the cash payment limit will apply to payments made to businesses for goods and services from 1 July 2019 and that transactions in excess of $10,000 will need to be made using electronic payments systems or by cheque.
"The economy-wide cash payment limit will help stamp out opportunities for criminals to launder the proceeds of crime into goods and services and will make it harder for businesses to hide transactions to reduce their tax liabilities," Minister O'Dwyer said.
"The Black Economy Taskforce found significant risks to legitimate commercial behaviour can result from large, undocumented cash payments being made for cars, yachts and other luxury goods, agricultural crops, houses, building renovations and commodities."
"We also know that businesses that insist on cash payment may be doing so to avoid their tax, retain welfare payments, or avoid child support and other obligations, and may therefore receive an unfair competitive advantage over those businesses that do the right thing."
Minister O'Dwyer said the consultation is about striking the right balance between cracking down on black economy participants and ensuring that businesses doing the right thing are not unduly burdened by increased red tape.
The Government welcomes stakeholder views on the design and implementation of this measure. The consultation paper is available on the Treasury website and submissions close 24 June 2018.
The consultation builds on recommendations made by the Black Economy Taskforce in their final report to Government. The Final Report and the Government's response are available on the Treasury website.