What’s happening?
Australians are reporting tax dodgers in record numbers. The Australian Taxation Office (ATO) has received more than 300,000 community tip offs about tax avoidance and other dishonest behaviour since 1 July 2019. In the 2024 to 25 financial year alone, almost 50,000 red flags were raised by people who noticed something suspicious.
Most reports involved shadow economy behaviour. This included demands for cash payment, undeclared income, and false business expense claims. The Australian Taxation Office says this behaviour costs the community billions in stolen taxes every year and weakens funding for health, education, transport, infrastructure, and disaster response.
Assistant Commissioner Tony Goding said businesses avoiding their tax and super obligations are harming honest Australians. He said: “When someone cheats the system, they’re not just breaking the law, they’re freeloading on honest businesses and the rest of the community.”
“Paying tax is not optional. Sooner or later, and probably sooner, if you’re operating in the shadow economy, the ATO will discover this, through our extensive data matching through initiatives including the Taxable Payment Reporting System and the Sharing Economy Reporting Regime, our industry benchmarks or as a result of a tip off from one of your workers, customers or competitors.”
Why it matters?
Tip offs help the Australian Taxation Office detect behaviour that harms honest businesses. Reports highlight concerns such as cash only payments, income that does not match lifestyle, false expenses, and sales that are not reported.
Mr Goding said: “People evading their tax and super obligations are directly harming honest businesses and putting an increased burden on other Australians. There really is no excuse.”
He added: “It’s unfair competition and it’s illegal. And when you’re caught, you don’t just have to cough up the tax. You’ll also face significant penalties plus interest on unpaid taxes and possibly even criminal sanctions.”
Local Impact
Townsville is one of the top regional locations for tip offs. Local residents are reporting issues such as cash payments, missing payslips, and income that does not match how a business operates. These reports help the Australian Taxation Office protect honest operators and ensure fair competition.
By the numbers
-
The Australian Taxation Office has received over 300,000 community tip offs since July 2019, including almost 50,000 in the 2024 to 25 financial year.
-
Queenslanders raised 10,630 tip offs in 2024 to 25.
-
Around 85 percent of analysed tip offs this year were suitable for further investigation by specialist teams.
Zoom In
Townsville sits in the top five regional Australian locations for tax related reports, alongside Newcastle, Robina, the Sunshine Coast Hinterland, and Toowoomba. Reports involved undeclared income, cash only payments, unpaid super, missing payslips, and businesses that did not report all sales.
The Australian Taxation Office noted examples that raise concern, including busy cafes that do not report profits, workers paid in cash without payslips, and high value cars parked outside businesses claiming to be struggling.
Zoom Out
Nationally, the top industries for tip offs this year were building and construction, cafes and restaurants, and hairdressing and beauty services. The Australian Taxation Office receives about 1,000 tip offs every week. When a report is received, staff cross check information to decide if further action is needed. Investigations are done by specialist teams who also work with cross agency partners through the Shadow Economy Taskforce.
The Australian Taxation Office also shared a real example:
Charlie’s construction company
Charlie owned a construction business and under declared income by accepting cash. After learning about AI tools, he created fake receipts for business expenses and bragged about how real they looked. Another business owner, Billy, felt uneasy about it and lodged a tip off.
An investigation found that:
-
Charlie’s reported income was five times lower than his real earnings
-
Business income was deposited into his personal account
-
Payslips and receipts were fabricated
The Australian Taxation Office spoke to Charlie and found he understood his obligations but chose to ignore them. He was hit with more than $2 million in estimated tax and penalties, and the case was referred to the Australian Federal Police.
What to look for next?
The Australian Taxation Office encourages anyone who suspects tax or super evasion to report it. Reports can be made anonymously online or by calling 1800 060 062.
