More than 1,400 ACT businesses have not yet complied with lodgement requirements under the Taxable payments reporting system (TPRS) for 2019–20, a black economy measure the Australian Taxation Office (ATO) uses to identify contractors who do not report or under-report their income.
The black economy (dishonest and criminal activities outside the tax and regulatory system) costs the community as much as $50 billion each year – approximately 3% of Gross Domestic Product (GDP), according to the ATO.
Black economy activity undermines Australian society by reducing funds for essential community services, such as health, education, transport and infrastructure, and community services, the ATO states.
The ATO estimates that around 280,000 businesses need to lodge a Taxable payments annual report (TPAR) for 2019-20; more than 60,000 have not yet complied.
The ACT accounts for 2% of total TPAR lodgements and 2% of outstanding lodgements, the ATO said. This is slightly higher than previous years, where 1% was outstanding.
More than 2,700 ACT businesses have already lodged a TPAR for 2019-20, but more than 1,400 still need to lodge, or advise the ATO that they do not need to lodge one.
“We know many businesses have been struggling as a result of COVID-19, with taxation obligations just one of many things on their ‘to do list’,” Assistant Commissioner Peter Holt said.
“So our first priority is to support businesses who need help. That’s why we are reminding people of their obligations to help them stay on track.”
As a result of COVID-19, more businesses need to lodge a TPAR for 2019-20, Mr Holt said.
2020 was the first year that road freight, information technology, security, investigation, or surveillance services that pay contractors may need to lodge a TPAR with the ATO.
TPRS has applied to the building and construction industry since 2012, and to businesses providing cleaning or courier services since 2018.
“As any good tradie will tell you, the spirit level is a critical tool to ensure construction work is done on the level,” Mr Holt said. “I like to think of the TPRS as a spirit level for tax obligations. Our role is to make sure the ‘bubble’ is centred as much as possible to keep things on the level and fair for everyone.”
Many businesses have fallen behind with their taxation lodgement obligations due to COVID-19, Mr Holt said. Forms were due by 28 August 2020, and are now well overdue.
“We encourage those businesses to lodge if they can, or call us if they need assistance or more time to lodge,” he said.
Some businesses may not realise they need to lodge a TPAR, but may be required to, depending on the percentage of payments received for deliveries or courier services.
Many restaurants, cafés, grocery stores, pharmacies, and retailers paid contractors to deliver goods to their customers. If the total payments received for these deliveries or courier services are 10% or more of the total annual business income, they must lodge, Mr Holt said. Penalties for non-lodgement of the Taxable payments annual report can be up to $5,550 (or $555,000 for multinational corporations and global entities).
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