Medium businesses report around 92% of tax voluntarily, without our intervention. Our engagement activities increase this to approximately 93%.
Our primary strategy for reducing the tax gap is increasing voluntary compliance. We do this by making it easy for medium businesses to get their tax right and keeping the system fair by tackling tax avoidance.
We make it easier by:
- Helping businesses to navigate complex tax law with clear and practical advice and guidance. Our compliance guidelines and taxpayer alerts give businesses certainty on our view of the law so they can make decisions with confidence.
- Providing timely access to tailored support, including our early engagement and commercial deals services. Businesses can talk to us when they are considering complex or large transactions, so they can get it right up front.
- Supporting transition and growth by providing the right tools for growing businesses. We provide businesses with information for managing obligations with less chance of error and mistake through good tax governance and record-keeping practices.
We keep the system fair by taking firm action against tax avoidance and those who deliberately evade their obligations.
Tax performance across both the high wealth and medium business populations is administered through our Tax Avoidance Taskforce programs.
We seek to improve voluntary compliance in the tax and super system through our engagement and assurance and risk-based strategies across the Top 500, Next 5000, Medium and Emerging, International risk and Abusive Use of Trust programs.
Through our programs, we:
- use risk models and data analytics to identify trends and behaviours and design strategies to mitigate risks across the population
- engage one-to-one with taxpayers to influence behaviour towards voluntary compliance
- work with businesses experiencing rapid growth or looking to expand offshore
- encourage compliance by informing medium business of what current tax risks and behaviours attract our attention so they can make informed decisions.
We apply firmer corrective actions such as penalties and prosecution where we detect evasion. This keeps the system fair for everyone.
Through our Tax Avoidance Taskforce, we have seen a steady increase in the number of businesses willingly participating in the tax and super system as seen in Table 2.