According to the Australian Taxation Office’s (ATO) latest annual report, tax debt increased by 6.5 per cent in the last financial year.
Australia-wide, the ATO is now on the hunt for $17.7bn in unrecovered debt – and some 60 per cent ($10.6 billion) is owed by small businesses.
Figures show tax debt jumped 6.5 per cent in 2012-13 – the ATO acknowledged that because most of the debt is owed by small-business taxpayers, “capacity and willingness to pay continue to make managing tax and superannuation debt challenging”.
Notably net tax collection increased 3.6 per cent in the last financial year, to a total of $311.7bn.
However, of the $17.7 billion owed, the ATO categorised $4.6 billion to be “either irrecoverable at law or uneconomical to pursue”.
As result of the high level of debt, and in an effort to combat the rising debt and reduce costs, the ATO is now piloting a debt recovery program and is in talks to possibly outsource elements of the debt recovery process to third parties.
The ATO’s level of collectable debt increased by 12.9 per cent in 2012-13.
