Since the day Australia’s tax office has come up with publicity blitz, cracking down on all incorrect claims , all the Australians have taken an extra mile to be “cautious” while claiming excessive work related discussions .
‘For the first time in two decades, the total value of this type of deduction was falling’, said Chris Jordan, the Commissioner of Taxation on Wednesday. Elaborating his viewpoint on the topic at a Senate estimates hearing in Canberra , he quoted – “I think for the last 20 years, each year the value of work-related expenses has gone up, and this year, although it’s not over yet , and very tentative , we are actually seeing a decrease” .
The fact that the Australians were taking an extra effort in the size of their deductions for work-related expenses proved that these words by Chris Jordan had spread like a fire.
According to the Australian Taxation Office, deductions of work-related expenses maintained a record as high as $21.3 billion last year.
As far as large corporations are concerned, ATO seeks to repossess billions in tax. The agency has been critically observing all the work related deductions claimed by 9.6 million individual taxpayers, whose source of income are wages or investments.
Tax Gap, refers to the difference between the actual amount that ATO collects from the taxpayers and the amount that would have been collected if the taxpayers fully obeyed the laws. The figures revealing the amount of ‘tax gap’ for those who aren’t involved in any sort of business turned out to be really shocking. An estimated amount of $8.7 billion in 2014-15 through ‘tax gap’ was observed.
While addressing the Senate Economics Legislation Committee, he said that by far the biggest driver of the tax gap for individuals was incorrectly claimed deductions for work related expenses.
Adding to his statement, he said “Our tax gap program measures the performance of each market, and for individuals we see a lot of people over-claiming by small amounts, which adds up to a lot”.
Over-claiming of work expenses revolved around many different factors. Few of them being ,claiming deductions that were not linked to income , claiming private expenses or claiming without any proper and authentic record , just to pretend the fact that the money has been spent , be it one way or the other .
Apart from this, ATO also focuses its attention on Tax-Dodging by Multi-National Corporations. Driving their focus towards this issue, ATO collected amounts as hefty as $5.6 million from so called Multi-Nationals and large corporations in the two years, ending July 2016.
Revealing all these facts and figures, Mr. Jordan said “We continue to take this fight to the big end of town –particularly those multinationals who try to cheat honest taxpayers”.
After ATO’s tough treatment of some small scale business was slammed by a whistle-blower, in an investigation by Fairfax Media, Mr. Jordan hit out at a “very disappointing” commentary regarding the same.
He emphasized on the fact that “emotive” and “one-sided accounts of isolated cases” were “undermining the integrity of the system.”