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  • Keeping things fair for small business

    6 April 2022

    The shadow economy costs around $11 billion in lost revenue every year, reducing funds for essential services like health and education.

    Also known as the cash or black economy, 'shadow economy' activities involve under-declaring income, including:

    • paying staff cash in hand
    • sham contracting
    • trading in illicit tobacco, illegal drugs or counterfeit goods
    • engaging in ABN, GST or duty fraud
    • phoenixing.

    A recent ATO podcast episode with Assistant Commissioners Peter Holt and Michael Morton gives their insights into shadow economy.

    'At one end of the spectrum there are a small number of operators who engage in large scale shadow economy activity, that's criminal activity, like trading in illicit tobacco' said Peter.

    'Then at the other end of the spectrum, is a much larger number of people cheating the system some of the time or a little bit.'

    Our Reported transactions service in ATO online supports those doing the right thing and provides transparency. Small businesses and tax agents can view third-party data we hold on taxable payments, government grants and business transactions.

    We're using every tool available to us to target those deliberately avoiding their obligations. To help us level the playing field for small businesses, if you know or suspect someone is involved in shadow economy activities, make an anonymous tip-off by phone or online.

    See also

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