The Australian Taxation Office (ATO) have revealed the industries they are watching carefully given the black economy is very active.
The black economy or ‘shadow economy’ refers to activities that take place outside of the tax system that includes business owners demanding payments in cash, not declaring all sales, and paying workers cash in hand.
The ATO estimates it loses around $11 billion in taxes each year from the shadow economy.
The ATO receives tip offs from the public and the industries that provided the most leads in the last year were:
- the building and construction industry
- hairdressers and beauty services
- cafés and restaurants
- road freight transport and
- management advice and related consulting services
They get tip-offs from other business owners, customers, members of the public and even employees with New South Wales providing over 13,400 tips offs last year (Sydney over 6,500), Victoria more than 11,500 and Queensland more than 9200.
The top five regional locations that the ATO received tip-offs from in 2021/22 were the Sunshine Coast Hinterland, Cairns, Wellington in NSW, Wodonga, and the Mornington Peninsula in Victoria.
The ATO is aware of the fact that customers ask for discounts for cash payments to avoid paying GST and that many workers are demanding cash wages especially where there are labour shortages.
The ATO said there were some “tell-tale signs” a business may be operating in the shadow economy, such as “cash only” signs, offering a discount for cash, not accepting card payments, failing to provide payslips to workers, not ringing up sales, or even running illegal software that deletes or modifies sales transactions.
Tip-offs can be made online via the ATO website, via the ATO app, or by phoning 1800 060 062. All tip-offs are private and can be made anonymously.
