ATO leaving tax money on the table

Australia Broadcast Center

10 hours ago

Rachel Mealey: The Tax Office is one of the biggest government agencies in the country and among the most secretive. But a Four Corners investigation has found the agency set up to protect our revenue is failing us badly, with more than $50 billion in taxes uncollected. Angus Grigg reports.
Angus Grigg: There's one number the ATO does not like to talk about. It's called collectible debt.
Karen Payne: Around the time we were looking it was about $34 billion.
Angus Grigg: Karen Payne is a former Inspector General of Taxation. The figure she mentioned has now grown to almost $53 billion. That's undisputed money owed to the ATO, which it has failed to collect.
Karen Payne: It's a big number and if you bring that number back into the revenue then that means hopefully less taxes that everybody else has to pay. It's in all of our interests that the debts get collected.
Angus Grigg: More worrying for Karen Payne is that this number has more than doubled over six years.
Karen Payne: The fact that it keeps rising is troubling.
Angus Grigg: The ATO collects hundreds of billions of dollars of our taxes every year, but despite its scale is subject to little oversight. This is a long held frustration for Senator Barbara Pocock.
Barbara Pocock: There's a lot that happens behind the closed door of the ATO that isn't open to scrutiny for us as average citizens and taxpayers.
Angus Grigg: The ATO tells us it's doing a stellar job, even as the scandals mount and evolve. Two years ago the ATO reported $2 billion was stolen in a GST scam that became known as the TikTok fraud.
News report: The ATO is blaming influencers on TikTok for promoting the scam.
Angus Grigg: New details uncovered by Four Corners show the ATO was warned its fraud detection systems were badly lacking. Ali Noroozi is a former Inspector General of Taxation.
Ali Noroozi: There have certainly been on notice that their risk assessment tools could do better.
Angus Grigg: Not only did the ATO fail to heed this warning, just two months before the GST scam blew up in mid-2021, it downgraded the fraud risk from severe to low.
Ali Noroozi: So given any kind of fraud really, you need to take it seriously. You need to act on those early warning signs.
Angus Grigg: Of the $2 billion stolen in the TikTok scam, just 8%, or $160 million, has been recovered. And of the 57,000 people who took advantage of it, just 122 have been convicted. The ATO says GST fraud is not widespread and the majority of businesses are doing the right thing. Karen Payne says we should all care about tax administration because it funds essential services.
Karen Payne: That allows the government to fund the services that we all benefit from. So health, defence, security, infrastructure. So it's a pretty key part of our democracy.
Rachel Mealey: The former Inspector General of Taxation, Karen Payne, ending Angus Grigg's report. And you can catch Four Corners tonight at 8.30 on ABC1.