Disclosure of Tax Debts
We advised in February of the Government’s intention to increase the ATO tax debt reporting threshold from $10,000 to $100,000 if the debt owed to the ATO was overdue by 90 days or more and there were no on-going discussions regarding its payment.
Since then, a Bill has been introduced in Parliament to this effect, with the policy expected to net at least $30 million over the forward estimates through clawing back unpaid tax debts.
While many in the trade credit protection industry would consider the $100,000 threshold too high – a $90,000 tax debt, for example, might be sufficient to cause many a small business to fold yet would not need to be reported under the new Bill – there is no doubt that something is better than nothing. However, small businesses also have their advocates, and they are suggesting that such a Bill, if enacted, would merely add further ammunition to an ATO they consider to be overly aggressive and unwilling to acknowledge errors.
Whether you are anxious to ensure the maximum possible transparency when trying to assess the risks of selling on credit terms or are concerned small businesses might be unfairly targeted, there are only a few days left to make your views known as part of the Bill’s public consultation.
Visit http://www.treasury.gov.au/consultation/c2019-T396363 for submission guidelines and more information.
Assuming the Bill is passed as intended, NCI’s credit information reports will be including any tax debts reported by the ATO.