Australia's Tax Debts Cross AU$47.11 Billion, Reports Tax Office

Australian Taxation Office has revealed that the Federal Government owed nearly AU$47.11 billion from taxpayers. Although aggressive debt collection measures were adopted, the amount of debt continued to rise, reported Ali Naroozi, inspector-general of taxation.

According to ABC, the estimated amount constituted almost 2.3 percent of Australia’s annual economic output. In the last financial year, the debt amount went up almost 9.7 percent. The report confirmed that nearly 24 percent of debts were disputed while insolvent firms and bankrupts who couldn’t pay any longer constitute another 19 percent of debts. However, Australian government still owed AU$27.32 billion that would have to be collected by the ATO as soon as possible.

Mr. Naroozi said that 60 percent of the debts are owed by small businesses that failed to repay within time whereas big businesses owed only 0.01 percent of the collectable debts as they tend to repay. As turnovers of the small businesses did not cross AU$672992.88, they faced higher debts. Incase of Individual tax payers, 16 percent of collectable debts, were owed by them. ATO has been trying to recollect billions via private debt collection agencies that began since 2005 with smaller debts. However, since 2011, ATO confirmed to have collected AU$3.18 billions of debts through external agencies.

According to ABC radio, Mr. Naroozi although praised ATO for using external debt collectors yet asked them to be more transparent in their work. He said, “They need to address the concern of the public because there is some opposition to it.” He further stated that using external agencies to collect tax involved the risks of records being leaked.

However, Mr. Naroozi, also said that the Tax Office was consistent and fair in terms of its work. He spoke on garnishee orders that he considered to be a key concern and suggested that juniors officers should first get the approval of the senior members before garnishing tax payers account of up to AU$37163.75 but complaints have been relatively lower and steadier across the last two years.

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