October Budget Breakdown: How this Affects your Tax

October Budget Breakdown: How this Affects your Tax

If you haven’t seen the latest October budget priorities, The A Firm has listed the tax highlights that might affect you. Read more below!

ATO $1.5 billion Funding to Pursue Tax Avoidance

The government plans to extend three major ATO Compliance Programs. This funding amounts to nearly $1.5 billion with an estimated revenue increase (over 4 years) of over $3.7 billion.

The three ATO Compliance Programs being extended are:

  1. Personal Income Taxation Compliance Program

This program is said to deliver proactive, preventative, and corrective activities to cover important concerns in non-compliance. This includes the overclaiming of deductions and income being reported incorrectly.

From 1st July 2023 the ATO will be provided $80.3 million to extend the Personal Income Taxation Compliance Program for 2 years. It’s estimated that (over 4 years) receipts will increase by $674.4 million and payments will increase by $80.3 million.

  1. Shadow Economy Program

This ATO program is said to enable a strong and co-ordinated response to target shadow economy activity, protect revenue and level the playing field for those businesses that are following the rules.

It’s estimated that (over 4 years) receipts will increase by $2.1 billion and payments will increase by $685.2 million.

  1. Tax Avoidance Taskforce

“The Tax Avoidance Taskforce ensures multinational enterprises, large public and private businesses (and associated individuals) pay the right amount of tax in Australia,” according to the ATO website. By providing further funding to this taskforce the government will support the ATO further. They plan to pursue new priority areas of observed business tax risks, complementing the ongoing focus on multinational enterprises and large public and private businesses.

From 1st July 2022 the ATO have been provided $200 million per year over 4 years. It’s estimated that (over 4 years) receipts will increase by $2.8 billion and payments will increase by $1.1 billion.

“As of June 2021, the Tax Avoidance Taskforce has helped the ATO raise $22.9 billion in tax liabilities. This revenue is used by the Government to fund essential services, which may include education, health and other community services.”

What's new for Businesses?

Modernising Business Registers Funding

Modernising Business Registers – program funding, director ID sustainment and registry stabilisation

The Modernising Business Registers (MBR) program focuses on making obligations easier for businesses. The program has been improving the efficiency of registry service transactions and providing more trusted and valuable business information. The new director ID requirement was released by this program in 2021.

According to the budget an additional funding of $166.2 million over 4 years will be provided to the program. This is to support the consolidating of over 30 business registers onto a modernised registry platform. This will be split between the continued delivery and design of the modernised registry platform, the continued operating the Director Identification Numbers regime, and the continued maintaining of ASIC’s registry systems.

Additional ATO funding plans as per the budget:

  1. The creation of a cross-agency Fraud Fusion Taskforce. This will address fraud and serious non-compliance in the National Disability Insurance Scheme (NDIS). Estimated to increase receipts by $291.5 million from recoveries of debts from NDIS providers
  2. Increasing foreign investment fees and financial penalties for breaches that relate to residential land. Estimated to increase receipts by $457.4 million over 4 years
  3. $345 million Electric Car Discount will exempt eligible electric cars from fringe benefits tax (FBT), cutting taxes on electric cars and encouraging their uptake
  4. Increasing receipts by $970.0 million over the 4 years by ensuring multinationals pay their fair share of tax

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