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Australian gov't vows to crack down on "taxless black economy"

Xinhua, April 5, 2017 Adjust font size:

The Australian government has promised to crack down on the illegal "black economy" which is costing the nation billions of dollars in lost tax revenue, ahead of its federal budget set to be handed down in May.

Australia's Prime Minister Malcolm Turnbull has already announced a "Black Economy Taskforce," which will be given powers to investigate the trend of under-the-table cash payments for work, which not only avoids tax revenue for the government but costs workers valuable welfare payments.

Head of the taskforce, the Australian Taxation Office's (ATO) Michael Andrew told Fairfax Media on Wednesday that he was astounded at the scale of the "black economy," suggesting that it has cost the government 15 billion Australian dollars (11.4 billion U.S. dollars) in tax revenue.

He said avoiding tax when paying workers had become "almost a national sport" for some employers, who are described as taking advantage of low income earners, students and overseas visa holders.

"It's a huge problem. It's really large and unfortunately it's going to take a significant amount of work to turn around societal attitudes," Andrew said.

He said while a lot of those partaking in the black, cash economy were crooks, there were some who were trying to do the right thing, but were unsure of the laws.

"You have to fill out 48 different government forms and have 72 licences just to set up a restaurant in New South Wales. That's causing people to lose confidence in the system."

According to the Australian Bureau of Statistics (ABS), the black economy is worth up to 1.5 percent of Australia's gross domestic product (GDP), or about 21 billion Australian dollars (15.9 billion U.S. dollars) overall.

Andrew told Fairfax Media "black economies" were most common in cafes and restaurants, hairdressers, building and construction companies, and "labor-for-hire" companies.

Andrew said the Australian Taxation Office was already using new data-matching technology to hunt down tax cheats. Endit