The Australian Taxation Office (ATO) has released its 2025-26 corporate plan, outlining key priorities, challenges and strategies for the financial year.
Debt collection and payment performance
In recent years, The ATO has tightened regulations on debt collection and payment compliance. This trend will continue in FY2025-26, with the ATO reaffirming the obligations of Australian taxpayers.
FY2024-25 saw record numbers of director penalty notices and garnishee actions issued to retrieve over $4 billion of unpaid corporate tax debt. The ATO stated that it is committed to continuing this decisive approach to debt enforcement.
“We will deploy the full powers available to us, including issuing Director Penalty Notices, taking garnishee action and, if necessary, taking wind-up or bankruptcy action,” the ATO statement read.
“We will effectively and efficiently pursue outstanding tax and superannuation debts, with our actions clearly demonstrating the consequences of deliberately not paying to deter others from avoiding their payment obligations.”
While their policy on debt collection remains strict, the ATO has reinforced its commitment towards differentiating vulnerability and deliberate non-compliance. A new vulnerability capability has been established to support taxpayers experiencing legitimate difficulty with debt and compliance obligations.
Fraud countermeasures
Advancements in technology have contributed to increasing instances of fraud with higher degrees of complexity. The ATO has highlighted its commitment to evolving its counter fraud measures to combat prolonged, persistent and sophisticated attacks.
The ATO received funding for a Counter Fraud Program tasked with real-time monitoring, increasing taxpayer visibility and control, and enhancing app support. The tax office believes that this program will strengthen its existing measures and combat serious offenders posing a risk to the tax and superannuation systems.
Payday super
It was announced in the 2023-24 Federal Budget that quarterly superannuation guarantee contributions would be reformed. This change will require employers to pay super guarantees simultaneously with salary and wage payments.
In its 2025-26 corporate plan, the ATO recommitted to enacting this reform, ensuring that the system will be ready by July 1, 2026.
This change has raised concerns from business owners as they expect a difficult transition period. Penalties will apply if an employer fails to pay super contributions within 7 days of wage or salary payments, placing further cash flow burdens on SMEs.
Digitising small business taxation
The ATO has estimated that collectable debt in Australia is over $50 billion, of which two-thirds owed relates to small business. It attributes a large portion of this debt to honest mistakes, poor recordkeeping and opportunistic behaviour.
The ATO aims to improve the digital resources available to small business to help eliminate these issues, reducing the compliance burden and preventing debt.
“We want to help small businesses get it right from the start and stay on track. Building on our strong foundations for digital transformation, we will continue to consult and collaborate as we implement a streamlined, digitalised tax experience with administrative opportunities that leverage technological advancement and data-driven insights,” the statement read.
Performance evolution
The Australian Public Service Commission (APSC) recently completed a capability review of the ATO, with the finding published on 27 March, 2025. The tax office has responded to the review with a structured action plan called Our Performance Evolution.
The plan addresses the priority areas for improvement outlined in the APSC review, including clear strategic communication, decision-making, collaboration and technological application.
“We have devoted significant effort to developing Our Performance Evolution, to inform our actions to strengthen and grow our capability,” the ATO stated.
“Through Our Performance Evolution we will be best placed to respond to the challenges posed by the dynamic environment in which we operate – now and into the future.”
