Every budget the ATO receives additional funds for special projects or to top-up ongoing compliance progams to provide them with additional life. Last year, the ATO was allocated funds to extend many existing compliance programs. This year, the ATO received funds to make pay-as-you-go instalments (PAYGI) monthly and to reduce fraud. The fraud initiative, when also linked with other regulatory initiatives, raises questions about taxpayer secrecy.

Dynamic PAYGI

The ATO will receive $10.9M to expand its dynamic PAYGI calculations pilot. The goal is that from 1 July 2027, small and medium businesses will be able to opt into using accounting software with embedded ATO-approved calculations to work out and vary their instalments and to report and pay PAYGI monthly. This is intended to support businesses by reflecting real time business activity.
Taxpayers with a demonstrated history of non-compliance will be required to report and pay PAYGI monthly.

Fraud

The ATO will receive $86.3M over 4 years to enhance its ability to detect and prevent fraud in real time, provide additional fraud protections for individuals and expand live monitoring of fraudulent access to tax agents, business and for high-risk superannuation changes.

Additional funding will enable the ATO to target fraud regarding the research and development tax incentive.

Garnishee changes

A garnishee orders are difficult to apply against a joint bank account because the legal portion of funds belonging exclusively to the individual debtor are difficult to identified. The Budget proposes to expand garnishee powers so that jointly held assets can be accessed where such arrangements are being used to frustrate recovery actions.

Tax agents

The Budget announced a particular provision for when a tax agent commits fraud against their client resulting in their client having a tax debt. It is proposed that the ATO would be able to pause the recovery of the tax debt against the client, and in appropriate circumstances waive that debt and recover it from the tax agent.

Taxpayer secrecy

Taxpayer secrecy is being eroded. The government has announced that it will progress further targeted exceptions to tax secrecy and enhancements to the ATO’s information gathering powers. CA ANZ,  CPA and IPA have made strong joint submissions in response to Treasury consultations on these topics urging great caution about such proposals.

The erosion of tax secrecy is also occurring in proposals which form part of the Government’s regulation package to make it easier to engage with government, such as the Consumer Data Right proposal to explore the potential for taxpayers to safely share their ATO-held data.

Payroll tax

In its efforts to reduce red tape, the government has announced that it is working with the states and territories to harmonise payroll tax administrative arrangements. No details or dates have yet been provided.