The Australian Bureau of Statistics (ABS) said yesterday total taxation revenue collected in Australia increased 4.2% to $464.72 billion in 2015-16. This was driven by a 2.5% increase in taxes on income to $265.11 billion and a 5.4% increase in taxes on the provision of goods and services to $110.18 billion. Company income tax fell 4.9% to $64.41 billion while taxes on individuals’ income jumped 4.8% to $192.05 billion.

In 2015-16, taxes on income represented 57% of total taxation revenue for all levels of government while taxes on provision of goods and services, including the GST, represented 23.7%.
Yet despite the huge amount of revenue, hundreds of millions in tax are being lost due to the widespread cash economy.

The ABS estimated the cash economy accounted for about 1.5% of GDP, or about $21 billion, as at 2013, the most recent estimate, about half which was untaxed, leading to millions of dollars of lost tax revenue each year.

“New payments technology from Business Transactions Concept (BTC) can help to reduce tax dodging by isolating the GST component of every business transaction that occurs via existing electronic banking platforms,” said Bernie Pack Director of Business Transaction Concepts.

“The patented Tax Capture technology provides banks with the opportunity to assist the government to collect the GST that has been captured and pay it to the Government, while transmitting key data alongside that money.

“For example, once a GST tax component is isolated, it is removed from the transaction amount before settlement, which will go a long way to help reduce tax dodging. Existing banking systems then withhold, report and reconcile GST for the relevant payment period on behalf of each business client.

“This would benefit States and Territories, and reduce pressure on the Federal Government to raise the rate of GST,” said Mr Pack.

Using the electronic banking system in this way would drastically reduce GST administration, compliance and reporting costs for business, recently estimated by MYOB to exceed $13.7 billion, Mr Pack said. Multiple payments can be made through a single interface within the existing electronic banking system.

“Banks are pivotal to the success of this scheme and to capturing tax payments,” Mr Pack said.“As electronic banking systems withhold, report and reconcile GST collected by business clients, the payment of GST is automated. This would also reduce the need for businesses to complete quarterly BAS statements,” Mr Pack said.

“All it would require is that the Turnbull Government to legislate to enable the existing banking system to withhold the GST component on behalf of the Commonwealth,” he said.

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