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ATO action to reduce the gap

How we support our clients to meet their compliance obligations.

Published 30 October 2023

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

We provide ongoing assistance to small businesses and are continually looking at ways to improve their tax performance. We have balanced compliance approaches in place to support those in need and ensure fairness in the tax and super systems.

Improving small business tax performance is a key focus area in our Corporate plan. We will achieve this by:

  • collaborating with our partners for a digital-first approach
  • encouraging enhanced system integration that guides small business taxpayers to meet their obligations on time with minimal errors
  • developing a roadmap for the enhanced integration of tax and superannuation into the digital ecosystem for small business
  • developing prototypes of concepts to streamline the tax experience, in consultation and co-design with external stakeholders

Strategies to support small business taxpayers who are doing or trying to do the right thing

Getting the right amount of expected collections 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 achieve this by:

  • understanding the value our partners provide to the small business community working closely with tax practitioners and other partners to help small businesses under their obligations
  • continuing to investigate what drives the kinds of mistakes business make so we can better target our products and make it easier for them to work with us
  • newly registered businesses can subscribe 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
  • offering a range of tools and services to support small businesses, to help small businesses understand and meet their tax obligations.

Strategies to deal with taxpayers who are deliberately avoiding their obligations

Given the impact the shadow economy has on the tax gap and on honest small business owners we continue to focus on businesses that are actively avoiding paying the right amount of tax.

Additional funding for the Shadow Economy Taskforce has boosted our capacity and capability to address these risks. We achieve this through:

  • using compliance strategies targeting businesses and tax professionals engaging in shadow economy activity.
  • using data-matching, risk modelling, benchmarks and third-party data to identify at-risk businesses.

For details on how this affects everyone, see the shadow economy.