It’s the best of times. It’s the worst of times. Via the ABC:
Australians owe more debt than ever to the tax man, with the Australian Taxation Office’s annual report revealing collectible debt rose to almost $24 billion last financial year.
Collectible debt has now reached $23.7 billion, up from $20.9 billion in 2016-17, the majority of which is still owed by small business.
The ATO said almost $10 billion of the $24 billion in debt owed is subject to objection or appeal, $1.1 billion is “uneconomical to pursue” and $3.7 billion is “irrecoverable at law”.
The annual report also reveals the agency collected more company tax from large corporates that had higher profits, and thereby beat its budget revenue target.
Net tax collections hit $397 billion in 2017-18, up $37.4 billion (10.4 per cent) over the previous year. This was $12.5 billion above the amount budgeted, and largely due to company tax collections increasing by $16.1 billion in 2017-18.
But to avoid double taxation, shareholders get a credit for the tax already paid by the company on the dividend part of their income. The ATO notes in its annual report that this could have future impacts on revenue.
“In reality, company tax receipts can create an entitlement to franking credits for resident shareholders that could offset a portion of these effects in future periods,” the ATO said.
There were 11.5 million individuals (that is, those not in business) in 2017-18. Total individuals tax collections grew by $13.1 billion for the year, which was $2.4 billion above budget and reflected stronger employment growth, the agency said.
The ATO has started using real-time analytics to send ‘nudge’ messages to taxpayers while they are lodging their online returns.
It said about 230,000 taxpayers got the nudge to review specific items and that this alone resulted in the agency collecting $24 million in revenue.
Take up of online lodgements, via myTax, increased 9 per cent, with more than 3.5 million from self-preparers. This was about 20 per cent of the 17.4 million electronic lodgements received for the year.
Total tax refunds were $102.3 billion, up 3.2 per cent from 2016-17. This included income tax refunds of $42.5 billion and activity statement refunds with of $59.8 billion.
The ATO is the unofficial lender of last resort to Aussie small business as it by turns relaxes and tightens its policing of unpaid GST and business taxes. When it blows out like this you know the pressure is real despite happy readings in other business surveys.
