What are the some of the biggest challenges for the ATO in 2025?
In recent years, one of the growing challenges we’ve seen is the unprecedented levels of fraud attacks promoted to the community. These attacks are agile, prolonged and persistent. The risk is amplified by global threats, organised crime, and an increasing number of data breaches in the community. Our focus on enhancing counter fraud measures has been bolstered this year through specific government funding for our Counter Fraud Program over the next 4 years. Our focus will be broad as we look for those seeking to game the system.
Additionally, the current and previous governments have specifically funded us, through the Tax Avoidance Taskforce, to ensure that tax is collected, and that revenue is protected. Demonstrating the taskforce’s ongoing success, the government announced in the most recent Federal Budget that they’ll continue to invest in the taskforce, with funding further extended for 2 years from 1 July 2026. We’ll continue to meet the challenge of ensuring that taxpayers operating outside Australian law are addressed as a priority tax risk, as we seek to sustain multinational and large taxpayer performance.
What’s your focus in 2025? What are some risks you’re looking to address?
Early and regular engagement with the community on unlawful tax schemes continues to be a focus, as is bringing consequences to those entities that promote these schemes.
We’re currently warning the community to be alert to the influence of potentially dodgy tax schemes spreading online (including via social media). Such schemes can be unlawful and are concerning because they can entice honest people into arrangements they don't understand. It’s important the community can identify a suspicious arrangement and take steps to protect themselves, so we’re stepping up our efforts this year to educate and inform them. The key thing for everyone to remember – whether you’re an individual or an organisation – is to get professional advice before committing to any offers promising to significantly reduce or avoid paying tax.
In terms of taking action against unlawful scheme promoters, we’ve very recently demonstrated our strong commitment to pursuing wrongdoing with successful action against the promoters of a Research & Development (R&D) scheme.
A joint investigation between the ATO and the Department of Industry, Science and Resources found that between 2014 and 2017, Mr Bakarich promoted unlawful tax schemes encouraging clients to lodge over-inflated, inaccurate, or unsubstantiated R&D tax incentive claims.
This outcome should act as a strong warning to anyone considering promoting unlawful tax schemes and to those who knowingly lodge incorrect tax returns.
We're letting the community know that if an offer seems too good to be true, get advice from a registered tax practitioner (or an adviser who has no connection to the arrangement) before entering or committing to anything. You can find out more on our website (Promoter penalty laws) and Legal database (PS LA 2021/1 Application of the promoter penalty laws).
Another key focus area is Illegal phoenix activity. The government announced an extension and enhancement of funding for us to continue to build on our existing work to combat illegal phoenix activity. The economic impact of illegal phoenix activity on business, employees, and government is estimated to be $4.89 billion annually. This amount includes the:
- $3.3 billion cost to business from unpaid creditors
- $155 million cost to employees through unpaid entitlements
- $1.44 billion cost to government.
What are you personally looking forward to in 2025?
I’m looking forward to working closely with our partners to take firm action where there’s non-compliant and fraudulent activity taking place in the tax and super systems. We’ll support those doing the right thing and ensure adequate consequences for intentional deceit or reckless behaviour by those who aren’t.
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