March 12, 2020

Anna Murray 

The Tax Summit 2020 was being held in Sydney from March 11 to 13 by Australia’s leading professional association and educator in tax, the Tax Institute which provides the best resources, professional development and networks. Commissioners of the Australian Taxation Office (ATO) attended the Tax Summit and revealed a new program targeting the high wealth private groups with the “tax gap” criterion.

The high wealth private groups are defined by the ATO as individuals who, including partnerships and trusts, control the net wealth of $50 million or more in Australia. The 2016–17 record showed there were more than 5,000 high wealth private groups made up of 9,000 individuals and 18,000 companies.

According to the ATO, the tax gap measures the difference between the total amount of income tax collected from taxpayers and the amount estimated by the ATO. In recent years, the ATO has continued such practice of computing the specific values on the tax gap for various taxpayer groups.

Commissioners reported at the Tax Summit that some of the high wealth private groups had engaged in taking artificial and non-commercial arrangements intentionally to avoid paying tax. The gross gap was $961 million in 2016-17.

The ATO announced at the Tax Summit that there will recruit an additional 100 people to the existing 1,500 staff in the Tax Avoidance Taskforce. In addition, the Tax Avoidance Taskforce will install a new program from July 1 and focus on avoiding tax evasion in the high wealth private groups. As a result of such engagement activity with the high wealth private groups, the ATO expects to collect more than $190 million in tax each year.

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