The ATO is currently owed over $105 billion in unpaid debt, Commissioner of Taxation Rob Heferen has confirmed.
“It’s the largest it’s ever been, and it is money that could be benefiting all Australians,” says Heferen.
“We estimate that just under half of that $105.1b is made up of collectable debt. That $46.4b is almost double the $26.5b of collectable debt owed in 2019.”
Heferen reports that only 1% of total debtors are responsible for roughly $11b, about 20% of the total debt. A large portion of these debtors often refuse to engage with the ATO or make efforts to deceive and manipulate.
“This approach we are taking to collect the tax owed to the government is deliberate and targeted, with action being taken for those who repeatedly refuse to engage with us and continue to ignore our reminders,” Heferen says.
“For these taxpayers, we are moving more urgently to deploy the full powers available to us and we are beginning to see some positive impacts of this work, through reduction in the amount of debt owed to the Government.”
The ATO has made commitments to crack down on non-compliance and unpaid debt, leading to increases in audits, director penalty notices and corporate insolvency figures.
New policies that will see the GIC and SIC made non-deductible from July 1, 2025 will also make the cost of ATO debt much more severe in an effort to deter taxpayers from accruing debt.
ATO debt collection
Debtors who continue to make efforts to deceive the ATO or refuse to engage will no doubt be met with significant repercussions. Those who have a debt to the ATO are encouraged to engage with financial professionals to determine the best course of action.
Struggling businesses will need to lean on accountants to ensure they do not accrue potentially fatal debt by making unintentional errors or late payments. In instances where debt is unavoidable, businesses will need to consult with accounting professionals to manage cash flow, asset protection and financial analysis.
If your business is concerned about tax debt or financial stability, Optima Partners can help. Contact us today to discover long-term solutions for your business.
