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  • Whole-of-government shadow economy action plan

    The term ‘black economy’ has now changed to ‘shadow economy’. This change reflects the Organisation for Economic Co-operation and Development’s (OECD) definition of unreported or dishonest economic activity. References to the Black Economy Standing Taskforce (BEST) will remain and the taskforce will continue to focus on activities identified under the OECD definition of ‘shadow economy’.

    In December 2016, the government established the Black Economy TaskforceExternal Link to develop an innovative, multi-pronged policy response to combat the shadow economy in Australia.

    At the time, the taskforce estimated the economic impact of the shadow economy could be as large as 3% of GDP, or approximately $50 billion. In 2018–19, the overall tax gap was estimated to be around $33.5 billion, or 7.3%. In response to the recommendations of the Black Economy Taskforce final report – October 2017 (PDF 7.7MB)This link will download a file, the government announced a whole-of-government package for tackling the shadow economy. The ATO has an important role in implementing many of these recommendations.

    By the end of June 2021 (three years into the program), we had raised an additional $2.6 billion from new and enhanced enforcement strategies, and implemented several new measures. These include:

    • removing tax deductibility of non-compliant payments
    • expanding the Taxable Payments Reporting System into new industries
    • increasing the integrity of the Commonwealth procurement process
    • collecting tobacco duties and taxes at the Australian border
    • establishing the cross-agency Black Economy Standing Taskforce
    • establishing the new Tax Integrity Centre (making it easier to make a tip-off) – a single point of contact to report suspected or known illegal activity or behaviour of concern.

    For more information see Small business income tax gap.

    Last modified: 20 Dec 2021QC 58365