The Australian Taxation Office (ATO) welcomes the Australian National Audit Office’s (ANAO) audit of the ATO management of small business collectable debt. The report found our debt management framework to be largely sound and the ATO agreed to all 8 recommendations.
The ATO’s core focus is collecting the right amount of tax owed to the Australian community, balancing firm, timely actions where needed with appropriate support for those who need it. The ATO’s recent fuel response demonstrates the need to be responsive to the environment, while continuing to safeguard the integrity of the tax system.
Our approach reflects the scale and nature of small business collectable debt, which accounts for around 66 per cent of total collectable debt, with around $35.9 billion owed as at 30 June 2025. This debt is largely undisputed and predominantly self-reported, with a significant amount of this debt relating to money that has already been withheld from employees or collected from consumers but not yet paid to the government. Addressing this debt is critical to maintaining a level playing field, ensuring those who do the right thing are not disadvantaged and protecting everyone involved – including other businesses and employees.
As the ANAO observed, the ATO applies a whole-of-debt approach, as required by law, while tailoring action based on the type of liability and the individual circumstances of taxpayers. This approach has evolved in response to events such as COVID-19, balancing recovery action with targeted support, increased focus on education and early engagement to help viable businesses get back on track. The ATO has also strengthened its support for taxpayers experiencing vulnerability through our Vulnerability Framework, which informs our approach to how we listen, communicate and connect people experiencing vulnerability (including small business owners) to appropriate assistance and support pathways.
The ATO will implement the ANAO’s recommendations as part of our commitment to continuous improvement, effective stewardship of the tax system and fair, balanced outcomes for small businesses and the broader Australian community.