20 September 2018

New bill to tackle the black economy

The Government has taken decisive action in the fight against the black economy.

Today, I introduced Bills into Parliament targeting black economy activities – the non-compliance of entities with their reporting and withholding obligations, non-reporting or understating of income by contractors, and illicit tobacco.

The Government is committed to a fair tax system that supports honest businesses and ensures black economy participants cannot escape paying their fair share.

The Bill introduces changes to deny a tax deduction for certain payments made by employers and other entities where they fail to comply with their withholding and reporting obligations at all. This will send a message to black economy operators that these behaviours are not legitimate activities and will discourage their employees and contractors from similarly non-reporting or under-reporting incomes.

The Bill also extends the taxable payment reporting system to the road freight, security and information technology industries. Payments made to contractors by entities in these industries must be reported to the Australian Taxation Office (ATO). Guidance material on the proposed application of the legislation will be published on the ATO website.

The Excise Tariff Amendment Bill is designed to combat illicit tobacco by shifting the taxing point for domestically grown tobacco to when it is manufactured. These Bills complement a Bill introduced by the Assistant Minister for Home Affairs which is designed to combat illicit tobacco that has been imported from overseas.

These Bills delivers on the 2018-19 Budget measures and recommendations from the Black Economy Taskforce’s Final Report and will help improve the integrity of the tax system.