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  • What we're doing to reduce the gap

    To reduce the tax gap, we identify and help businesses that are not paying the right tax.

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    Improving small business tax performance

    We are exploring ways to deliver quality services and provide ongoing help to improve the tax performance of small businesses, taking into account that the environment they are operating in is rapidly evolving.

    Balanced compliance approaches are in place to support those in need and ensure fairness in the tax and superannuation systems.

    It is important to recognise the role Australia's tax system plays in supporting the community. Protecting the integrity of the tax system and maintaining its effectiveness is critical.

    Given the impact the shadow economy has on the tax gap and on honest small business owners, we will continue to focus on businesses that actively avoid paying the right tax.

    We're enhancing our enforcement strategy to better target people doing the wrong thing. With increasingly sophisticated technology and data capabilities, it's getting easier to identify businesses that avoid paying their fair share. We have a range of approaches to address this behaviour, from applying penalties and interest, right through to prosecution.

    Getting the right amount of tax paid in the first place is the most efficient way to administer the tax system. We foster willing participation by considering how we can make it easier for businesses to comply.

    We provide a suite of support tools and services to help small businesses meet their tax obligations. We look into what drives the kinds of mistakes businesses make so we can better target our products and make it easier for them to work with us.

    Newly registered businesses are subscribed to the New to Business EssentialsExternal Link email service. This delivers timely and helpful government information to them over the first 12 months of operation. Through this service, new business owners are introduced to a range of government services and support.

    Working with tax professionals and our other partners

    We understand the value our partners provide to the small business community. We work closely with them to help small businesses understand their obligations.

    Key partners we work with include:

    • tax professionals (Tax agents, BAS agents, bookkeepers and business advisors)
    • other business advisory groups (such as Financial Councillors Australia)
    • industry associations
    • financial institutions and legal advisors
    • education providers
    • other departments across all levels of government, including the  
      • Australian Securities and Investments Commission
      • Fair Work Ombudsman
      • Department of Prime Minister and Cabinet
    • stewardship forums and other key stakeholders such as the  
      • Small Business Family Enterprise Ombudsman
      • Small Business Commissioners
      • Small Business Champions.

    Most recently, we've partnered with tax professionals and business advisors to deliver some of our education activities for small business taxpayers.

    Helping business owners who have made mistakes

    Tax can be complicated, and we know that business owners can make honest mistakes.

    If you make a mistake, we'll explain where you've gone wrong and how to get it right next time. As part of our audit process we consider the nature of the error and whether the taxpayer is a candidate for penalty relief.

    If you’ve done the wrong thing but you want to turn things around, come to us. We can help business owners who voluntarily disclose to get back on track.

    Helping business owners under difficult circumstances

    It has never been a more challenging time to be a small business owner. If you're going through a difficult time, whatever the reason, we have options available to help you.

    We can arrange payment plans, lodgment and payment deferrals if you are struggling to meet your tax or superannuation commitments. You can speak with us directly or ask someone to do this on your behalf.

    We want to work with you before your situation gets more difficult. But it’s never too late to ask for help.

    Last modified: 31 Oct 2022QC 59960