ATO: Tax Debt Reporting
Buried in the Government’s Mid-Year Economic & Fiscal Outlook published in December, there is a small announcement to the effect that the Government will amend earlier plans and “increase the threshold of business tax debts that can be disclosed to credit reporting bureaus from $10,000 to $100,000”. The MYEFO goes on to explain that “The increased threshold of $100,000 balances supporting compliance with minimising the impact on businesses with smaller tax debts by targeting higher risk tax debts”.
A requirement that the responsible Minister must first consult with the Australian Information Commissioner prior to any reporting changes being introduced has also been added. While there is no specific date provided for implementation, it is intended to be immediately after Royal Assent is given to the enabling legislation.
Although any reporting of ATO commercial tax debt will still be of some use, the tenfold increase in the reporting threshold will clearly lessen its impact considerably and trade credit suppliers may find themselves opening accounts with customers quite unaware of an imminent winding up over a substantial tax debt.