When was the last time that your small business was subject to a review by the ATO? Hopefully, you have never had that experience. For major companies, however, if was often a frequent occurrence. Since most businesses in Australia gross under $2 million per year, the ATO has generally focused on larger companies that should pay a greater tax rate and have more potential for hiding large sums of money from the government. Now, though, new legislation has been proposed by some of the nation’s larger, public companies, and the ATO has altered their risk determination framework to back off from their previously aggressive stand.
Everything started when a report was filed by the Tax Justice Network (TJN) that caused a stir. According to the report, 29% of the nation’s 200 largest public corporations were being taxed 10% or less. In fact, 14% of these large corporations were accused of not paying any taxes at all. In response, companies and lobbyists leapt to the defense of the large corporations, claiming that all of the businesses are paying their fair share of taxes according to the current tax legislation.
So what does this mean for big business in Australia? Things just got a little bit easier on the nation’s largest companies. Just 4 years ago, 13 companies were subject to regular evaluations to ensure that they were compliant in paying all legitimate taxes. Now only one of those companies still faces the same regulations. On the other hand, the lowest risk category has jumped from just 642 companies to over 33,000 business across the country.
The result is that a number of larger businesses are facing less of a watchful eye from the ATO, while many smaller business have been bumped up into the low risk category, whereas they previously were not considered a risk at all. This places extra pressure on small local businesses who find themselves under the taxman’s watchful eye.
While the government may cave to the demands of corporations and slant tax legislation in their favor, D32 has been established to assist local businesses to grow and thrive. By joining forces with D32, you can help support local family owned shops and eateries, and contribute to a better community. Western Australia’s businesses need your support to keep corporate conglomerates from taking over. We encourage everyone to do their part to help local entrepreneurs reach their goals and enrich the community.