In the 2023-24 Federal Budget, the government announced there is further funding for the ATO’s GST compliance program with an additional $588.8 million over 4 years from 1 July 2023 to ensure businesses meet their GST obligations, including accurately accounting for and remitting GST, and correctly claiming GST refunds. This measure is expected to increase ATO receipts by $3.8 billion over 5 years.
GST is one of the largest revenue-raising measures the government has available to it, collecting around $74 Billion annually.
Whilst the ATO states that the GST system is operating well overall, they have calculated that there is a net GST gap estimated to be around 5.9% of the total GST revenue collected (approx. $4.3 billion).
The ATO notes the following issues are the major cause of the GST gap:
Non-reporting of GST
Under-reporting of GST
Over-claiming of refunds
Non-payment of GST liabilities.
To address the GST gap and these major causes, the ATO has developed a 4 Pillars approach to apply to taxpayers including:
Correctly registered for GST
Lodgment of BAS by the due date
The correct amount of GST reported
Paying the correct amount of GST on time.
With the additional budget funding for GST compliance, the ATO will continue to develop and roll out compliance measures that address these areas.