Residents in NSW are more likely than anywhere else in Australia to report a person or business they suspect of dodgy tax activity or other dishonest behaviour, it has been revealed.
The Australian economy is short-changed about $16 billion in unpaid taxes every year, but the Australian Taxation Office has had some big recent wins and is looking to tighten the screws further.
Not declaring income, paying workers in cash and failing to report all sales are just some of the tactics used to game the system.
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“These businesses are deliberately undercutting their competitors and gaining an unfair advantage in their industry,” ATO assistant commissioner Tony Goding said.
“People who cheat their competitors and the community will likely try to cheat their customers too.”
Goding said Australians are fed up with businesses operating in the shadow economy — which relates to legal and illegal economic activity that is not reported or taxed — and are helping the ATO to “level the playing field”.
About 50,000 tip-offs from people who know or suspect tax evasion are made to the ATO annually.
About nine in every 10 reports from customers, employees, other businesses and “even family and friends” are deemed “suitable for further investigation” by specialist teams.
Most reports are about the building and construction sector, beauty services and hospitality, including cafes and restaurants.
NSW people and businesses were the subject of 15,516 reports about tax avoidance and other dishonest behaviour in the 2023-24 financial year, the most anywhere in Australia.
Victoria was next with 11,256 tip-offs and 10,629 came from Queensland.
Western Australia (4399), South Australia (2694), ACT (963), Tasmania (866) and Northern Territory (321) rounded out the rest of the country.
The ATO also received 391 reports of fraudulent activity from foreign entities.
“The number of reports we have received tells us that Aussies have had enough. Dodging your tax obligations clearly no longer passes the pub test,” Goding said.
A community tip-off helped catch out businesses using dodgy electronic sales suppression tools (ESSTs) to avoid paying a combined $23 million in tax earlier in 2024.
ESSTs can be attached to point-of-sale systems and are designed to alter transaction records.
Another call to the hotline helped authorities identify a shipping container packed with tobacco that was wrongly declared as fitness equipment.
The difference in products equated to duty and GST revenue evasion of $1.3 million.