In the ongoing quest to improve tax compliance, the government is proceeding with plans to extend the ATO’s third party data collection powers to include:
- Sales of real property;
- Sales of shares and units in unit trusts;
- Trading sales through merchant debit/ credit services (e.g. EFTPOS);
- Taxable government grants and other payments.
An exposure draft of the proposed amendments was released for comment on 10 July 2015. The changes will apply to transaction occurring on or after 1 July 2016, with a start date for the implementation of the measures on 1 July 2017. The increased funding required is estimated at close to $78m with expected increase in revenue of over $600m over the forward estimates.
The ATO are already collecting information on:
- Medicare and health insurance; and
- Government welfare payments.
While the changes will ensure increased compliance through greater tax transparency, it is important to note that the data collection cannot be relied on exclusively to prepare your tax returns. In fact with the current data collection, there are often omissions, as well as overstatements of income.
Now more than ever, it is important for individuals and businesses to talk with their accountant to ensure income and deductions are being recorded and reported correctly, in order to avoid audit risk and/ or over taxation.
Mayberry Meldrum Anderson are the Murwillumbah Accountants with a finger on the pulse. Call us to feel confident your business and taxation affairs are being looked after.
Smith, K 2014, ‘Third Party Reporting of Tax Data’, Charter, April, p. 52