Managing your tax debt
Print this page
Print entire document
Tax is collected so the government can provide services for the community, such as welfare, health, defence and education.
Everyone has an obligation to pay tax according to what they earn. While most people try to do the right thing in paying their tax, some find it difficult to stay on track with their tax obligations.
Many people overestimate the size of the problem. Debt is often a temporary problem, caused by unforeseen personal circumstances or a short-term business downturn. Businesses might miss an activity statement payment, then find themselves with a debt that grows with general interest charge (GIC). Some people may end up with a debt if they haven’t put enough money aside from the interest they receive on their savings or from a capital gain, such as the sale of property.
The simplest way for you to manage your tax is to pay on time. If you owe tax or are finding it hard to pay on time it is important to contact us early on. We will work with you to solve the problem, often by making an arrangement to pay by instalments.
It is important to lodge your activity statements and tax returns on time even if you are unable to pay by the due date.
If you are experiencing serious hardship, you can apply for release from payment of some or all of your tax liabilities.
Whether you’re an individual taxpayer or running a business, we want to make it easy for you to comply with your tax and superannuation obligations. We offer a range of services and tools to help you avoid falling into debt.
When people fall behind with their tax payments, we address the debt early while it is manageable. We take a differentiated approach to each taxpayer based on their individual circumstances, including their payment and lodgment compliance history.
If you make a payment arrangement with us but don’t keep to it, or ignore your payment obligations, we will use stronger measures such as garnishee action to collect the debt. In some cases, we may take legal action to make sure that the correct tax is paid. This ensures a level playing field and fairness for all taxpayers.
For more information about our responsibilities and commitment to helping you and treating you fairly, refer to Taxpayers’ charter - what you need to know.
System maintenance and issuesAccess managerAbout online services
More forms and instructions Arrow button
More tax rates and codes Arrow button
More calculators and tools Arrow button
Legal Database Arrow button