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Cash Economy

 The Cash Economy (or the Black Economy as the ATO refers to it)

The Black Economy Taskforce

The ATO are putting a large amount of resources into trying to eliminate the Cash economy.
So much so they have setup the Black Economy Taskforce to combat the problem. The Taskforce estimates that the Black Economy's impact on the economy could be as large as 3% of Australia's GDP or 50 billion dollars.
You can read more about the Taskforce's action plan here.

Examples of the Black Economy

Electronic Suppression Tools

An interesting example the Taskforce has shared with us relates to a Point of Sale software provider.

The ATO became aware of a company advertising that their software would enable it's user to delete transactions without leaving any trace.

This meant that businesses could make a cash sale, issue the customer with a receipt and then delete the transaction so there was no evidence that the cash wasn't banked.                                       

The software became very popular!

So much so that the Taskforce received a warrant to gain access to their customer base. The Taskforce visited businesses that had purchased the software as customers and made purchases using cash. They later returned and asked the businesses to show them the transactions.
Many businesses were caught out having deleted cash transactions.

Not surprisingly the software is no longer available in Australia!

Quoting the wrong ABN

In 2017 the Taskforce was in the national headlines when it revealed a massive tradie tax fraud that dominated the news cycle.

The Taskforce had discovered that suppliers and contractors were not quoting their own Australian Business  Number but were instead quoting Bunning's Warehouse Australia's Australian Business Number.  

Incredibly up to 40% of ABN's quoted in the Northern Territory were that of Bunnings Warehouse.

These suppliers and contractors were doing this to circumvent having to pay tax on their income.

It was estimated that this fraud had cost the Australian taxpayer hundreds of millions of dollars in missing tax revenue. 

In order to crack down on this practise in their Final report the Taskforce has included an overhaul to the Australian Business Number system including a proposal to implement real time ABN ID and verification system.

Other ways the ATO are tackling the Black Economy is reporting of subcontractor payments, benchmarking business to find the average cash / eftpos a business should receive and contacting businesses that do not fit the benchmark.

The latest initiative is to restrict the amount of cash allowed in any one transaction to $10,000 from the 1st January 2020. The Taskforce is sending a strong message that it is not acceptable to avoid paying tax by paying with cash.
We are sure there is more to come...


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