In December 2016, the government established a taskforce to develop an innovative, multi-pronged policy response to combat the shadow economy in Australia.
At the time, the taskforce estimated the economic impact of the shadow economy could be as large as 3% of GDP or approximately $50 billion. In 2018–19, the overall tax gap was estimated to be around $33.5 billion or 7.3%. In response to the recommendations of the Taskforce final report – October 2017 (PDF, 7.7MB)This link will download a file, the government announced a whole-of-government package for tackling the shadow economy. We have an important role in implementing many of these recommendations.
By 30 June 2024 (6 years after the program started), we had raised an additional $7.9 billion from new and enhanced enforcement strategies and implemented several new measures. These include:
- removing tax deductibility of non-compliant payments
- expanding the Taxable payments annual report requirements into new industries
- increasing the integrity of the Commonwealth procurement process
- collecting tobacco duties and taxes at the Australian border
- establishing the cross-agency Shadow Economy Taskforce addressing shadow economy activities.
- establishing the new Tax Integrity Centre (making it easier to make a tip-off) – a single point of contact to report suspected or known illegal activity or behaviour of concern.
For information on how we estimate and reduce the small business income tax gap, see Small business income tax gap.