What is the Black Economy?0:56
A look at the Black Economy and the Australian Government's plan to tackle it.
Bunnings at the centre of a huge tradie tax scam
THOUSANDS of tradesmen are allegedly using Bunnings to dodge tax, costing the government hundreds of millions of dollars each year.
The Australian reports the hardware giant is the victim of an enormous scam, in which tradies list its Australian Business Number instead of their own on invoices.
According to the Black Economy Taskforce, the retailer has one of the most quoted ABNs in the country — and it’s blocking the tax office from keeping track of tradies’ income.
“We found out that more than 40 per cent of ABNs quoted in the Northern Territory were Bunnings,” said Michael Andrew, chairman of the Black Economy Taskforce.
“People ask for an invoice or valid receipt and they get the name of the company, but they then get an ABN of someone else such as Bunnings: the result of which (is) you can’t trace then where the money really went.”
Mr Andrew says the ABN system is simply not working, and at least 3.5 million ABNs across the country have never lodged a tax statement or tax return.
“We issued 180,000 ABNs last year to people on tourist visas who are not allowed to have an ABN. We’re seeing secretaries and receptionists out there with ABNs at the moment.
“So we have to basically work to put more integrity and governance around the issuing of ABNs and make sure that they’re something that is valued, not something which is just automatically issued.”
Bunnings declined to comment when contacted by news.com.au.
The revelations come just one day after advocacy groups slammed a proposal to strip consumers of their legal protections if they pay in cash and fail to get a receipt.
It was one of 35 recommendations contained in an interim report from the Taskforce, as it searches for ways to close an estimated $40 billion black hole in the economy.
In a joint submission to the inquiry, the Consumer Action Law Centre, consumer group Choice and Financial Counselling Australia strongly opposed any such sanctions.
They argued such a scheme could instead create a perverse incentive for businesses to operate in cash as a way of stripping consumers of their legal rights, describing it as a “significant loophole” that would be “contrary to the intention of legislators”.
Along with fraudulent invoicing and cash payments, the inquiry is also examining the sharing economy — including the business models of companies like Airbnb and Uber — and the increase in contracting as more employers look to avoid tax.
The government is under increasing pressure to come up with answers after Labor unveiled a new, tough tax reform agenda of its own.
The Opposition is demanding a crackdown on tax minimisation schemes, which it insists will boost equality without affecting 98 per cent of Australians.
Among other things, the Opposition believes it can claw back $17 billion over 10 years by cracking down on discretionary trusts.
“The lucky few, riding the business end of the tax system are able to opt out of paying taxes,” said Labor leader Bill Shorten.
“Nice deal if you can get it! The real challenge here is that we want to create one system for Australians.”
Originally published as Bunnings victim of tradie tax scam
