Cleaners and couriers are the key targets of new legislation introduced into Parliament last week, which aims to curb black economy activities.
Minister for Revenue and Financial Services Kelly O’Dwyer introduced the Treasury Laws Amendment (Black Economy Taskforce No.1) on Wednesday, 7 February, which will create new offences to ban electronic sales suppression tools at each stage of the supply chain. This includes hefty penalties to discourage the use of this software.
The Bill will also extend the current Taxable Payments Reporting System to areas of ‘high risk’ – the cleaning and courier industries – to require annual reporting to the Tax Office of payments made by businesses to contractors operating in these industries.
O’Dwyer said the new law will “restrict the avenues for people participating in the black economy, whether by engaging in tax evasion or by deliberately underreporting their income.”
The Bill is in response to the release of the Black Economy Taskforce’s interim report released in March 2017. Draft legislation and explanatory materials were released in May 2017 for public consultation.
BDO national tax director, Lance Cunningham, said the Bill is a positive start to combat the issues the Black Economy Taskforce identified in its report last year.
“The introduction of laws to restrict sales suppression software and the extension of the taxable payment reporting System (TRPS) to the courier and cleaning industries make sense and we expect there should not be too much of a problem in getting these measures through Parliament,” Cunningham said.
“These measures are a good start to this process but these measure on their own are unlikely to affect the more blatant tax avoidance in the cash economy. There are many more recommendations and issues for consideration in the Black Economy Taskforce report and we look forward to seeing how the government responds to some of the other recommendations/considerations that would have a more substantial effect on the cash economy, like the proposal to make it illegal to undertake cash transactions above a certain threshold.”
Guidance material on the Bill will be published on the Tax Office website.