The Australian Taxation Office (ATO) is taking a decisive stance this month by revealing the names of 9,000 businesses to credit reporting agencies because of outstanding debts of at least $100,000. In a resolute message, they have signaled a return to their standard operating procedure.
The ATO has made it clear that there will be no more second chances. Stressing that businesses must promptly settle their dues or, at the very least, communicate with them. With over $5 billion at stake, the consequences for non-compliance are significant.
ATO assistant commissioner Jillian Kitto emphasized that the business should either settle the debt or communicate with ATO to prevent their tax liabilities from negatively impacting their credit rating. “We offer businesses ample opportunity to re-engage with us”, Kitto said. “However, those who show continued and ongoing disregard for their tax and super obligations will have their debts disclosed.”
While the ATO does not take these disclosures lightly, they assert that businesses that refuse to settle their dues or engage with them will face consequences. Kitto urged businesses to initiate dialogue with ATO, underlining the willingness of the Tax Office to help these enterprises manage their debts.
As of July, the ATO had already forwarded notices of intent to disclose more than 22,000 businesses with overdue debts of $100,000 or more overdue by more than 90 days. It anticipates issuing over 50,000 notices of intent throughout the current financial year, with a total of more than $5 billion owed by businesses that are allegedly for disclosure.
To prevent the disclosure of their debt, businesses are required to settle their dues or establish an appropriate payment arrangement within 28 days of receiving the notice of intent. “A disclosed debt can impact a business’s ability to receive finance and they may lose suppliers.” Kitto acknowledged.
Kitto highlighted that the ATO has now drawn a clear line in the sand. “Through the pandemic, we shifted our focus from debt collection to stimulus payments and assistance with tax, but it is now time to re-establish the culture of paying tax on time,” she stated.
Her message is clear: this decisive action of the ATO is essential to safeguard the interests of the Australian community and other creditors and to maintain a level playing field for businesses that fulfill their obligations.
“If you have an outstanding tax debt, we strongly urge you to pay it or reach out to us or your tax professional so we can provide you the right support,” Kitto concluded.