Jenny Wong discusses the Government's draft legislation to increase transparency of business tax debts.
Recently the Government released exposure draft Treasury Laws Amendment (Tax 3 Transparency) Bill 2018: Transparency 4 of taxation debts. It will allow the Australian Taxation Office (ATO) to report to registered credit reporting bureaus (CRBs) the tax debt information of businesses that do not effectively engage with the ATO to manage those debts.
It seeks to implement the Treasurer’s announcement in the 2016-17 Mid-Year Economic and Fiscal Outlook (MYEFO) that the ATO would disclose businesses with unsettled tax debts over $10,000 that are 90 days overdue, who have not effectively engaged with the ATO.
Highlights of the new legislative framework include:
The amendments apply in relation to records and disclosures of information on or after the first 1 January, 1 April, 1 July or 1 October to occur after the day the Bill receives Royal Assent (regardless of whether the information was acquired before, on or after that day).
This is a positive measure for small businesses enabling them to evaluate their dealings with other businesses that may not be paying their tax debts on time. It helps them to avoid incurring losses by assessing the other parties risk and changing their trade terms accordingly.