ATO commissioner Chris Jordan calls out businesses that treat tax debts “like a free loan”

Outgoing Australian Taxation Office (ATO) commissioner Chris Jordan says he is “unapologetic” about the tax office’s shift to take stronger action to recover debt from small businesses, making it clear he is determined to not take his “foot off the pedal” during his last six months in the role.

In an address to the Tax Institute’s Tax Summit in Melbourne today, Jordan said making a dent in the ATO’s debt book is “front of mind” and small businesses “continue to be over-represented” in that debt book.

Of the $50.2 billion in collectable debt owed to the ATO, small businesses account for more than $33 billion, said Jordan. Of those figures, some $23 billion is unpaid business activity statement (BAS) debt.

And while Jordan said the tax office is “very focused on every group in the tax system”, he made special mention of business operators who appear to be deliberately flouting the rules.

“There are a growing number of profitable businesses who have the capacity to pay their bills but are choosing not to,” he said in the speech, which also canvassed the work the ATO has been doing to stamp out multinational tax avoidance.

“Businesses appear to be de-prioritising paying of tax and super.

“This is concerning and is out of step with what we know, which is that the vast majority of taxpayers pay on time, and it’s unfair for them that some choose not to. This needs to stop.”

Jordan, who has been tax commissioner for 10 years, or “just shy of 4000 days” as he puts it, called on the tax professionals in the room at the Tax Summit to support the ATO’s efforts.

“We are hearing more and more from tax professionals that some businesses are rolling the dice, treating ATO liabilities like a free loan. This is not acceptable,” he said.

“You can reinforce to your clients they are only the temporary custodians of GST, pay-as-you-go withholding, and super guarantee — it’s not theirs.

“You know the signs when a business is struggling, on the brink of insolvency, or perhaps needs to be told the time has come to exit gracefully,” he added.

Jordan, who will finish his role in February 2024, recognised that the current economic environment is a challenging one and that “many individuals and small businesses are doing it tough”. This puts added pressure on advisors to those businesses, he said.

The role of the ATO here is in “designing systems that make it easy to comply and hard not to, and to be fair and empathetic in our administration”, he said.

But as we learn more about the full scope of the massive TikTok GST scandal that has cost the ATO billions, Jordan confirmed the tax office is “cracking down on deliberate attempts to defraud the Australian taxpayer, which is nothing more than theft from the community”.

This includes “embedding fraud prevention methods into our systems, and increasing our detection capabilities”, he said, as well as establishing a Fraud and Criminal Behaviours Group with 500 dedicated ATO staff.