The Australian, December 8, 2017
Tax commissioner Chris Jordan has issued a passionate call to arms to Australians to stop paying tradespeople in cash as he confronts a host of black-economy rorts that include the fraudulent misuse of the Bunnings ABN by service providers.
Mr Jordan said cash discounts were ripping “billions of dollars” out of the economy that would otherwise be going to services such as schools and hospitals.
In his exclusive interview series with The Australian, Mr Jordan has made a direct plea to taxpayers that urges them to stop the “less for cash” mentality ingrained in the Australian psyche.
“Stop paying cash for a discount,” he has told taxpayers. “Because you are effectively cheating the system or helping someone else to. This is not a victimless crime. If you pay cash for a discount, in many cases you are effectively ripping off yourself as an Australian taxpayer, because this type of behaviour is what sees billions flow out of the tax system and into the cash economy.”
Meanwhile, tax consultant Chris Seage has called for the Australian Taxation Office to “get tough” on tradies who escape into the cash economy by issuing fake invoices using the Bunnings ABN. He has proposed dispatching hand-picked audit “hit squads” to black-economy hot spots, to launch high-profile prosecutions that discourage tax cheating.
Earlier this year, The Australian exposed the practice that sees many tradies provide invoices that fraudulently quote the Bunnings and other ABNs to escape identification and the tax system.
The federal government’s Black Economy Taskforce claims 40 per cent of ABNs quoted in the Northern Territory were the Bunnings ABN, with similar percentages in other states. There is no suggestion Bunnings has done anything wrong.
The taskforce has also estimated that the total size of the Australian cash economy could today be well in excess of $25bn a year.
Taskforce chairman Michael Andrew has called for a system allowing real-time ABN verification to ensure service providers do not use “fictitious” ABNs.
Mr Jordan said the government’s ABN Lookup site and related apps already allowed businesses to check ABNs on demand. “I don’t know what more you can do than to have an automatic look-up on an app,” he said.
“It’s not magic. You can’t wave a wand over an invoice and tell me it’s not real. But there were 770 million (ABN) look-ups last year, so there is an automatic system (for checking).”
He also urged householders using tradies to do their bit by creating a digital trail for their transactions with their service providers. “If I’ve got a cleaner or a gardener, I transfer it into an account (and) my job’s done. There’s a trail.
“As a household owner, I don’t need to do anything else. I don’t need to check an ABN.”
Mr Seage, a former ATO audit manager, said he believed the tax office would soon look to adopt a more aggressive stance on rorts such as the fraudulent use of the Bunnings ABN, that would involve publicly “naming and shaming” offenders. “I suggest with the Bunnings ABN scam, they need to resort to old-fashioned investigative skills,” he said.
“They should send in a flying squad of auditors to hot spots around the country where it’s being abused. They need to contact the person who received the invoices misusing the Bunnings ABN, and work back from there until they find out who was contracted for that piece of work.”
The next step would be to take offenders to court. “The ATO then needs to turn these into prosecutions, in which they put the tax cheats on the stand, and make sure to get maximum publicity when they do it,” he said.
“This will send a message to fraudsters that the game is up.”