Accountability

THE 'BLACK' ECONOMY

Alan McGillivray - Monday, November 05, 2018

The so called 'black economy' is rife.

In essence, it refers to people who operate outside the regulatory tax system with either misguided intent or misunderstanding of their obligations.

The black economy is more common than we think.

How many of us have paid tradies, gardeners etc cash without the exchange of relevant paperwork? For many people this is actually an important source of income.

The 2018/19 federal budget announced measures to fight the $50 billion black economy where cash is king and none of it ends up as tax dollars and (as the name suggests) exists in the shadow of the real economy.

In an attempt to raise billions of extra dollars, and look to arrest the incidences of lost revenue, limits cash payments for purchase goods and services to $10,000 were proposed by the former Turnbul-led Government.

As part of the cash-in-hand crackdown the government will introduce an economy-wide cash payment limit of $10,000 to reduce money laundering and tax evasion, to apply from 1 July 2019.

In a recent report, KPMG used a methodology employed by the Australian Bureau of Statistics (ABS), which estimated the size of Australia’s black economy at $32 billion per annum

Participation in the black economy penalises honest taxpayers, undermines the integrity of Australia’s tax and welfare systems and creates an uneven playing field for the majority of small businesses doing the right thing.

It also imposes significant costs on the economy and society.


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