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ATO seeks new small business destruction powers. This must be stopped.

Thursday, February 15, 2018

The Turnbull government is proposing new legislation that would give the ATO the power to report (alleged) small business debts to credit rating agencies.

We absolutely oppose this, as reported in The Age and Sydney Morning Herald this week.

We want this Treasury Laws Amendment (Tax 3 Transparency) Bill 2018: Transparency of taxation debts withdrawn. It has nothing to do with transparency. It is a new grab for power by the ATO.

Earlier this week we explained how the ATO already can and does inflate alleged small business tax debts by more than double. And we explained how, in just the five separate self-employed cases with which we've assisted, the ATO alleged a total of $1,676,000 in debt which, after years of fighting, the ATO admitted was wrong. In short, we say that the ATO is scamming people.

The ATO already has unbelievable powers that you might expect to find in a dictatorship but not in a (supposedly) just democracy.

Most people would be staggered to find that the ATO has powers that far exceed those of any police force.
a) The ATO can: Raid your home without a warrant. Allege a debt without proper evidence. Demand payment of an alleged debt. Forcibly take money from your bank account. Sell your house. Bankrupt you. It can do this before you have a chance to 'disprove' the debt.

b) ATO abuse: Based on our experience, we conclude and allege that the ATO abuses its powers to bully and harass small business people into paying alleged tax debts that are often false or poorly supported by the evidence.

c) No ATO oversight: The ATO is not subject to any effective oversight other than to bodies that 'review' and make 'recommendations'. There is no independent authority that stops ATO abuses.
The result of this new 'ATO to credit rating agency report law' would be to increase the ATO's ability to destroy self-employed people—even when an alleged debt is unproven or wrong. And this move is from a supposedly pro-small business Turnbull government. Go figure!

Robert Gottliebsen in The Australian as described the laws as 'terrible'. The Inspector-General of Taxation has 'pulled apart the legislation'.

We have put in a detailed submission. Our arguments in full are here.
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