Home topics news Image credit: Towfiqu barbhuiya on Unsplash News News ATO tax debt defaults push thousands of businesses over the edge Yajush Gupta September 5, 2024 Thousands of Australian businesses are facing insolvency after racking up massive tax debts, according to new data from CreditorWatch. New data from credit reporting bureau, CreditorWatch, reveals that thousands of private Australian businesses have failed in the past six months after defaulting on massive tax debts. Its latest data on ATO tax debt defaults – debts with the tax office of more than $100,000 that are over 90 days late – shows that 34 per cent of these private businesses, 7,003 in total, have become insolvent or voluntarily closed in the six months that CreditorWatch has been tracking the data. The ATO’s outstanding debt blew out during the pandemic, when it took a ‘hands off’ approach to debt enforcement, and now sits at approximately $52 billion (around $34 billion of that is owed by SMEs). The tax office has significantly ramped up what it calls ‘firmer actions’ in the post pandemic period in an attempt to reduce the size of this debt. These actions include business tax debt disclosures to credit reporting bureaus, garnishee orders and Director Penalty Notices. CreditorWatch CEO, Patrick Coghlan, says it is appropriate that the ATO ramps up its debt enforcement program with such a huge amount outstanding. “The ATO is simply trying to collect the tax that all companies are obliged to pay,” he says. “I truly sympathise