What we are doing about the cash economy
Our Compliance program provides details on what we are doing about the cash economy. Our primary objective is to promote a 'level playing field' that is fair for all businesses.
The strategies we use to combat the cash economy are making it harder for dishonest operators to get away with not reporting cash income - making it fairer for everyone.
Taxpayer attitudes
We use a model to show how attitudes to complying with tax and superannuation laws vary throughout the community, ranging from those willing to do the right thing - most taxpayers - through to those who have decided not to comply.
Our strategies treat people differently based on how their individual attitudes and behaviours align with our compliance model. Those treatments range from awareness-raising activities and providing help and assistance through undertaking phone and record-keeping reviews to comprehensive audits and default assessments (see Definitions). In the most serious cases, we refer cases for criminal prosecution. The maximum penalty for this type of offence is 10 years imprisonment.
Detecting businesses doing the wrong thing
We use a variety of indicators to identify businesses for review or audit. These indicators include results from data matching, comparisons of business information against our small business benchmarks, and reports from the community.
When contacting taxpayers, we always take into account the individual circumstances of the business and provide an opportunity for them to explain their personal situation.
For more information about our indicators, see Data matching and Small business benchmarks.
Helping businesses doing the right thing
We are committed to encouraging voluntary compliance within the community, so we seek to make it as easy as possible for people to get it right.
We continuously develop tax-related information and support tools for businesses and their representatives, including:
- Record keeping essentials page - information and tools to help you maintain good business records, manage cash flow and make sound business decisions.
- Small business benchmarks page - key business ratios for more than 100 different types of businesses that you can use to compare your business's performance with other similar businesses in your industry.
- Small business support page - information on a range of topics that may help you run your business as well as find more information and get support from us.
- Correcting mistakes and disputing decisions - explains how to correct mistakes in information you have already reported to us. If you voluntarily disclose an error that increases your tax or reduces your credits, we are likely to reduce the penalties and interest that apply.
- Employer essentials page - links to useful information that will assist you, as an employer, to meet your Commonwealth tax and superannuation obligations and avoid incurring penalties.
- Personal living expenses guide - explains the importance we place on examining taxpayers' household expenditure when seeking to identify unreported cash income in the course of reviews or audits.
- Personal living expenses worksheets - helps you review your business record keeping, determine if your reported income is enough to support your actual lifestyle and assess your risk of being selected for an audit.
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Last Modified: Friday, 19 August 2011