The Australian Taxation Office’s underground economy and personal income tax compliance programs are expected to increase tax levies by $1.2 billion over the next four years, according to the new tax update. Mid-Year Economic and Fiscal Outlook (MYEFO) released Thursday.
The government will provide $111 million in funding to continue the ATO’s personal income tax and underground economy compliance programs, as well as $0.6 million for an independent needs review in ATO resources.
Programs are funded until June 30, 2023.
“The extension of the two specified compliance programs will allow the ATO to continue to address high-risk behavior during the broader review,” the government said.
“This measure is expected to increase revenue by $1.2 billion and increase GST payments to states and territories by $187.7 million over the forecast estimate period.”
The government will also provide $111.9 million over four years starting in 2021-22 to support the delivery of government priorities in the Treasury portfolio.
Under the $111 million funding package, the tax office will receive $8.6 million to help the administration involved in delivering business support programs.
Funding of approximately $23.5 million will be provided to the Australian Small Business and Family Business Ombudsman (ASBFEO), which will also provide core Treasury capabilities and reforms related to the payments system and crypto assets.
In addition, $7.0 million will be provided to ASIC to implement Financial Sector Reform Act 2021 (Hayne Royal Commission response – best advice)the costs to be partially offset by fees and levies collected by ASIC.
The ATO will also receive $42.4 million over the next two years to upgrade its IT systems.
This will include building the tax office’s data matching capabilities and its ability to pre-fill tax returns through MyGov.
Separately, the government will provide $2.4 million over three years from 2022-23 to develop a service that supports superannuation funds to transfer members’ superannuation balances to the ATO for the reunification with eligible active accounts of members identified through the service.
The account matching service would operate for two years, starting in 2022-2023.
The government has also delayed the start of the single default account measure by four months, from July 1, 2021 to November 1, 2021. This delay has given employers additional time to prepare for the new requirements. It is estimated that this will increase revenue by $19.0 million over the forecast estimate period.