By JOHN VAN KLAVEREN
UP TO 2500 Geelong enterprises could be dabbling in the risky business of the cash economy, according to the Australian Tax Office (ATO).
The ATO said its latest statistics revealed the local businesses might be deliberately hiding income to gain an “unfair advantage” over honest competitors.
Senior assistant commissioner Michael Hardy said the ATO had identified the businesses as “potentially” involved in the cash and hidden economy.
“We know the majority of businesses meet their obligations and pay their fair share of tax. Unfortunately, there are still businesses that deliberately pay cash-in-hand wages, fail to pay their employees’ super and do not report all their income,” Mr Hardy said.
“We have recently identified 18.2 per cent of businesses in the Geelong region which may be deliberately hiding income to avoid paying tax and superannuation.
“What we’re seeing from the information we’ve collected is that certain businesses in the building and construction industry, restaurant and cafes, hairdressers and beauticians are more likely to be involved in these activities.”
Mr Hardy said a recent audit on a building and construction business reported income lower than expected to meet personal and business expenses.
The audit found that the owner was undercutting others in the industry and avoided almost $170,000 in taxes and was penalised more than $60,000, Mr Hardy said.
“This is just one example of the level of unfair competition that honest businesses can face.”
Mr Hardy said the ATO used a range of tools to identify businesses using the cash and hidden economy, including reviews, data matching, comparison with small business benchmarks and community reports of businesses evading tax.
Geelong Chamber of Commerce executive officer Bernadette Uzelac believed the actual percentage of local businesses failing their obligations would be lower than 18 per cent.
“Most businesses are doing the right thing, although there might be a few culprits out there,” Ms Uzelac said.
“It’s important that everyone gets a fair chance and it keeps business on a level playing field, especially under the economic conditions in Geelong at the moment.”
