2024-25 Federal Budget: Tax Administration
Statutory discretion for ATO to deal with tax refunds and debts on hold
The Commissioner of Taxation will be given a discretion to not use a taxpayer’s refund to offset old tax debts where that debt had been put on hold before 1 January 2017. The tax law will be amended to provide for this ATO discretion which will apply to individuals, small businesses and not-for-profits. The discretion will maintain the ATO’s current administrative approach to such debts.
Source: Budget Paper No 2, p 12.
Student loans indexation reform
Indexation of the Higher Education Loan Program (and other student loans) debt will be limited to the lower of either the Consumer Price Index or the Wage Price Index, effective from 1 June 2023, subject to the passage of legislation. The measure will apply retrospectively.
Source: Budget Paper No 2, p 63.
Data matching program for migrant workers income and employment
A pilot program matching income and employment data will be conducted between the Department of Home Affairs and the ATO to mitigate the exploitation of migrant workers and abuse of Australia’s labour market and migration system. This measure forms part of broader reforms to the migration system.
Source: Budget Paper No 2, p 136.
Strengthening ATO’s ability to combat fraud and extension of compliance programs
The ATO will be provided additional funding to continue various compliance programs. The current ATO Personal Income Tax Compliance Program will be extended for another year from 1 July 2027 to enable the ATO to continue its focus on emerging risks to the tax system. The Shadow Economy Compliance Program and the Tax Avoidance Taskforce will be extended for 2 years from 1 July 2026.
Funding will be provided to the ATO to improve its detection of tax and superannuation fraud, including to upgrade its information and communications technologies to be able to identify and block suspicious activity in real time. A new compliance task force will also be established to recover lost revenue and block attempts to obtain refunds fraudulently. Funding will also be provided to improve ATO’s management and governance of its counter-fraud activities.
The ATO will also be given additional time within which to notify a taxpayer if it intends to retain a business activity statement (BAS) refund for further investigation. The current required notification period of 14 days will be extended to 30 days, aligning it with time limits for non-BAS refunds. This measure will take effect from the start of the first financial year after assent of the enabling legislation.
Source: Budget Paper No 2, pp 15–17.
2019–20 Budget measure on black economy will not proceed
The 2019–20 Budget measure “Black Economy — Strengthening the Australian Business Number system” will not proceed as integrity issues are being addressed through enhanced administrative processes implemented by the ATO.
Source: Budget Paper No 2, p 11.