Tax Tips Procurement: Black economy measures

Written by: Evan Lowenstein


In the lead up to Christmas, it is timely to remind clients that the due date for all tax returns being lodged will occur very soon.
You have until the 15 May 2019 to lodge your returns for the 2017/2018 year, after which date severe penalties may be imposed by the ATO.
So this is a friendly reminder for all clients to get their paperwork in to us as soon as possible, so that we are able to prepare your returns before the expiry of deadlines.


From 1 July 2019, businesses seeking to tender for Commonwealth Government procurement contracts over $4 million (inclusive of GST) will be required to provide a statement from the ATO that indicates that they are compliant with their tax obligations.
The Treasury’s procurement connected policy guidelines released in November 2018 include a description of the satisfactory ‘Statement of Tax Record’ requirement and sets out the other key components that are aimed at improving the integrity of the tax system.


The ATO has reported that a record number of 2018 tax returns have been finalised in the first four months of “Tax Time” thanks to the prefilling of data by the ATO and the correction of mistakes using analytics and data-matching. Over $11.9 billion has been refunded to taxpayers. More than $53 million in errors were detected and corrected before refunds were issued, said Assistant Commissioner Kath Anderson.
Ms Anderson said the ATO’s advanced analytics allow it to scrutinise more tax returns than ever before and to make immediate adjustments where taxpayers have made a mistake.


This tax time the ATO has advised that it is increasing its efforts to identify taxpayers who leave income out of their return. Assistant Commissioner Kath Anderson said that “those who leave out income to avoid paying their fair share of tax should be aware that there can be penalties and interest. Penalties can range from 25% up to 75% of the shortfall, in addition to paying the money owed”.
The ATO stated that the most common situations in which taxpayers deliberately or accidentally do not include income are: income from second jobs, capital gains on cryptocurrency, the sharing economy, the gig economy and foreign-sourced income.
In the past we have commented on the ATO data collection methods as far as the sharing economy goes. Because the ATO now receives information from many different authorities, our clients should be aware that income from any of these sources must be declared.


There are currently many scams out there and the scammers will stop at nothing to try and extort money from unsuspecting people.
It was reported in the popular press that even some celebrities have been scammed, including Mike Sheehan, who has revealed that he was a victim of a scam where someone posed as his own daughter in order to extort money over his email! It was claimed that he has lost a six figure sum!
The message and the solution are simple, do not give away personal banking or email details to anyone. Always verify the identity of the caller/sender first.