ATO pauses some compliance activities for businesses in lockdown

small business tax

The Australian Taxation Office has reportedly hit pause on some of its ‘firmer’ debt and lodgement activities for businesses “adversely impacted” by ongoing COVID-19 lockdowns.

According to a report in Accountants Daily, both businesses and individuals in New South Wales, Victoria and Canberra have been offered some breathing room when it comes to their tax debts.

However, the ATO has stopped short of halting compliance activities altogether, as it did during the lockdowns of 2020.

Under the current pause, it is thought businesses will not have to disclose tax debts to credit reporting businesses. Garnishee notices and statutory demands will also likely be suspended.

The pause is intended to help mitigate the effects of lockdowns, particularly businesses that are facing significantly reduced revenues.

“We are mindful of the environment in which clients are operating, particularly those clients in extended lockdowns and [we will] tailor our enforcement approach for clients who are adversely impacted by these lockdowns,” an ATO spokesperson reportedly said.

But Elinor Kasapidis, senior manager of tax policy at CPA Australia, said the measure “doesn’t go far enough”, and called for a moratorium on debt collection by all government agencies.

She also suggested the government should consider a waiver on late lodgement penalties.

“Now is not the time for governments to be hard-headed when it comes to compliance activity,” she told Accountants Daily.

“Australian businesses need support to get them through lockdowns and to recover afterwards,” she added.

“We’re not asking the ATO to waive these amounts, we’re just asking for some breathing room.”

During the lengthy COVID-19 lockdowns of 2020, the ATO put a stop to all compliance activity. However, that reportedly led to a shortfall of some $1.3 billion in its compliance revenues.

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