We're stepping up our compliance action against businesses deliberately omitting and under‑reporting income, including cash, so honest ones aren’t disadvantaged.
Since July 2025, we’ve:
- audited 300 small businesses
- uncovered more than $70 million in unpaid taxes
- issued over $26 million in penalties to businesses omitting or under-reporting income.
This firm compliance action is part of our ongoing efforts to address shadow economy behaviours and is supported by:
- receiving more than 1,000 community tip-offs each week about tax avoidance, including practices such as demanding cash for work or failing to report cash payments
- having our compliance teams actively target cash-only businesses that deliberately avoid their obligations and attempt to operate outside the system
- using sophisticated data and analytics to detect discrepancies across bank data, point-of-sale systems and third-party reports, identifying those who may be omitting income.
We’re continuing to see cases where businesses conceal cash takings, fail to issue receipts, keep incomplete records, or pay staff ‘off the books’. These behaviours erode public trust, reduce funding for essential services like hospitals, schools and roads, and create an uneven playing field for businesses doing the right thing.
How we’re taking action
Recent outcomes show the consequences of such behaviour, including a director of a restaurant that deliberately under-reported income by voiding sales and offering cash discounts. This resulted in more than $1.4 million in unreported income, with over $555,000 in PAYG withholding shortfalls and over $784,000 in large penalties applied for their deliberate behaviour. Small businesses like this one, who avoid their responsibilities risk strong compliance action, significant penalties and reputational damage.
We’re urging small businesses to report all income, keep accurate records and meet their tax and employer obligations.
For more information, visit Our focus areas for small business. You can also speak with a registered tax professional.
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