Wealthy entrepreneurs caught in ATO’s tax sting

Some of Australia’s wealthiest entrepreneurs have been caught up in a blitz by the Australian Taxation Office which recouped more than $430 million in the last year. 

Those recently caught in the crackdown include former tyre king Bob Jane and entrepreneur and socialite Geoffrey Edelsten, according to reports by Fairfax.  

The ATO runs two dedicated compliance programs for the wealthy, which employ 500 staff and use sophisticated data-matching systems to assess tax and financial records to determine who will be formally audited. 

The first program is labelled “the SME market segment” and it comprises “economic groups” with turnover between $2 million and $250 million and wealthy individuals and their economic groups with net wealth over $5 million.

The second program is the ATO’s “highly wealthy” program, which monitors 2600 individuals with assets worth more than $30 million.

The highly wealthy program collected nearly $300 million in unpaid taxes and penalties in 2013. 

Michael Cranston, deputy commissioner of the ATO, told Fairfax while most wealthy Australians “did the right thing”, the ATO’s compliance program ensured the country’s rich were paying “their fair share”. 

Court records from Bob Jane’s legal stoush with his son, Rodney Jane, show a 2013 audit of the entrepreneur shows he allegedly underpaid his tax obligations for over 20 years.

Bob Jane has been hit with a $1.08 million tax bill by the ATO.

Edelsten has also been targeted after allegedly underpaying his tax obligations by nearly 50% in 2011.

The 70-year-old has recently filed for bankruptcy in the United States and received a $5 million tax bill last year.

Gavan Ord, business policy advisor at CPA Australia, told SmartCompany those with the means must pay an appropriate share of taxes, and if not, the system will work to ensure that they do. 

“This applies to all of us, not just higher income earners,” he says.

“The ongoing work of the ATO is a strong demonstration of its vigilance in ensuring compliance with the tax laws and follows recent moves to enhance both efficiency and the innovativeness of the ATO. CPA Australia supports such action as it is an essential part of a well administered tax system.”

Stephanie Caredes, tax counsel at the Tax Institute, also backed the ATO’s crackdown.

She says the ATO’s highly wealthy program is essentially about enforcing the law to ensure that the correct amount of taxes are paid. 

The program has received funding boosts in 2006, 2008 and 2013, which Caredes says “indicates that the ATO has concerns about risk of non-compliance in this area”. 

SmartCompany contacted the ATO but the organisation declined to comment further.

Trending

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments