Name & Shame: the new game for the ATO

The ATO’s hands are no longer firmly tied with confidentiality of taxpayer information provisions; the ATO can now divulge recalcitrant taxpayers.

In a December 2017 LinkedIn article, I noted the Government’s announcement that it intended to introduce legislation to allow the ATO to report to Credit Reporting Bureaus (CRBs) the tax debt information of businesses that do not effectively engage with the ATO to manage their tax debt.

Finally the legislation has been drafted, consulted on, finalised and passed by Government on 22 October 2019, receiving royal assent on 28 October 2019.

The ATO is now able, where certain conditions are met, to disclose tax debt information of businesses to registered CRBs.

The purpose of this development is to:

  • encourage businesses to engage with the ATO to manage their tax debts and, if necessary, propose a sustainable payment plan;
  • support more informed decision making within the business community by making large overdue tax debts more visible; and
  • reduce the unfair advantage obtained by businesses that do not pay their tax on time, or engage with the ATO in managing their tax debts.

 The ATO will only disclose tax debt information of a business to a CRB if the business meets all of the following criteria:

  • it has one or more tax debts, of which at least $100,000 is overdue by more than 90 days (originally the proposed threshold was $10,000);
  • it is not effectively engaging with the ATO to manage its tax debt;
  • it has an ABN, and is not an excluded entity; and
  • the Inspector-General of Taxation is not considering an ongoing complaint about the proposed reporting of the entity’s tax debt information.

 The ATO will notify a business in writing if it meets the reporting criteria and give the business 28 days to engage with the ATO and take action to avoid having its tax debt information reported.

A positive initiative for tax-paying businesses and the credit community.

December 2019