ATO owed over $100 billion
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The Australian Taxation Office (ATO) says it is owed an unprecedented level of unpaid tax - now over $100 billion.
According to ATO Commissioner Rob Heferen, the amount owed is the highest it has ever been, representing around one-sixth of the total collections for the 2023–24 financial year.
“Largely due to adjustments through COVID, collectable debt is now over $50 billion, with our broader debt book over $100 billion,” Heferen said in an address to The Tax Institute's Tax Summit 2024 in Sydney, posted online.
He noted that much of this debt is made up of taxes already withheld from wages, such as GST and pay-as-you-go (PAYG), that have not been passed on to the government. This also includes unpaid superannuation entitlements.
The Commissioner emphasised the need for stricter measures, citing a shift from the lenient approach the ATO adopted during the COVID-19 pandemic.
“We will be firmer and faster in dealing with unpaid GST, PAYGW, and super,” Heferen said, noting that stricter rules on payment plans and interest remissions have already been implemented.
The issue of unpaid tax and superannuation, Heferen argued, directly undermines fairness within the tax system.
“Paying tax isn't optional, and it's our responsibility to ensure a level playing field,” he said.
The Commissioner stressed that businesses who comply with their tax obligations should not be disadvantaged by those who fail to meet their responsibilities.
Since his appointment as Commissioner in March 2024, Heferen has been vocal about the importance of integrity within the tax system, referencing the fallout from the PwC scandal as a reminder of the high ethical standards expected from tax professionals.
“The system needs to be, and be seen to be, fair,” he said.
Looking ahead, Heferen also outlined key priorities for the ATO, which include strengthening debt collection and enhancing fraud countermeasures.
He said that the ATO's efforts to tackle fraud have been bolstered by increased government funding, which will be used to improve the agency’s capability to detect and address fraud in real time.
The Commissioner also discussed the importance of sustaining large corporate taxpayer performance, noting that efforts by the ATO's Tax Avoidance Taskforce had secured $32.4 billion in additional tax revenue over the past eight years.
Heferen said that this work remains a critical priority, as large corporations play a vital role in Australia’s tax system.