Grant Wardell-Johnson, Lead Tax Partner, KPMG Economics & Tax Centre, assesses the scale of the untaxed economy and proposes some specific recommendations the government should consider to address it.
In 2017, the ATO published for the first time its estimate of the black economy’s contribution to the PAYG ‘income tax gap’, amounting to $2.08 billion for 2014-15.
Using a methodology employed by the Australian Bureau of Statistics (ABS), KPMG estimates the size of the country’s black economy as $32 billion per annum.
We believe the annual aggregate gap in terms of the GST on sales, PAYG tax on wages, plus income tax on businesses and on self-employed profits, would exceed $5 billion.
In this report, KPMG unveils a series of proposals which could claw back untaxed income: