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  • ATO action to reduce the gap

    A range of taxpayer behaviours can affect the GST gap. These include:

    • non-reporting of GST
    • under-reporting of GST
    • over-claiming of refunds.

    Examples include simple errors ranging from incorrect classification of transactions in accounting systems, through to deliberate actions such as creation of false tax invoices, incorrect claiming of private expenses and participation in the shadow economy.

    We continue our efforts to minimise the tax gap and maximise voluntary compliance through the delivery of a balanced and targeted compliance program focused on preventative early engagement and assurance activities.

    We monitor compliance through the use of third-party data holdings, analytics and risk mitigation activities. Our focus is on activities designed to prevent compliance issues before they arise. We aim to foster voluntary compliance by supporting those who want to do the right thing and assisting them to reduce mistakes.

    In dealing with those not doing the right thing and deliberately evading GST and other taxes, we take a firmer approach to deter them from making the wrong choices.

    We continue to develop and explore opportunities to educate and improve our support and guidance for new and existing businesses.

    To strengthen confidence and provide assurance that our largest businesses are paying the right amount of tax, we are systematically engaging with them to obtain objective evidence that supports their willing participation.

    We will continue to work towards closing the gap by:

    • making it easy to comply and hard not to – by further streamlining, automating and integrating GST tax obligations to reduce the cost of compliance and increase assurance
    • building trust and confidence within the community – which supports willing participation and delivers government commitments including the Black Economy Taskforce commitments.

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      Last modified: 19 Oct 2020QC 57175