What is the Black Economy?
The black economy is a complex, multi-faceted phenomenon operating across Australia’s workplace relations, financial, welfare, procurement and migration systems.
What is the black economy?
The black economy refers to dishonest and criminal activities that take place outside the tax and regulatory systems, or people who are known to the authorities but do not correctly report their tax obligations.
Black economy behaviours include:
- Demanding or paying for work cash-in-hand to avoid obligations;
- Not reporting or under-reporting income;
- Underpayment of wages;
- Identity fraud;
- Visa fraud and bypassing visa restrictions;
- ABN, GST, and duty fraud;
- Dealing in illegal drugs and tobacco;
- Sham contracting – presenting an employment relationship as a contracting arrangement;
- Illegal phoenixing – liquidating and re-forming a business to avoid obligations (the ATO now has the discretion to retain tax refunds in relation to taxpayers engaging in phoenixing);
- Money laundering; and
- Dealing in counterfeit goods.
Black economy activities have harmful consequences such as:
- Workers missing out on their entitlements (for example, proper wages, leave or employee protection)
- Honest businesses being undercut by dishonest businesses that don’t pay the tax or superannuation they’re supposed to
- Criminals operating business models outside regulatory systems, and funding organised crime.
The ATO uses a range of education, engagement and enhanced enforcement activities to address the tax and superannuation aspects of the black economy:
- Combat black economy behaviours – including under-reporting income and overclaiming expenses;
- Ensure businesses meet their employer obligations when paying employees or contractors;
- Address employers paying cash-in-hand, underpaying wages, failing to withhold tax or not contributing to super;
- Address illegal phoenix activity – businesses liquidating and re-forming to avoid obligations;
- Prevent tax fraud;
- Deal with illicit tobacco, duty and excise evasion;
- Target intermediaries and agents who enable behaviour; and
- Prosecute the worst offenders.
If you suspect a black economy behaviour, report it by calling 1800 060 062 or online at ato.gov.au/tipoff.
myGov email scam
The ATO and Services Australia are warning the community about a new email impersonation scam that is doing the rounds. The fake emails claim to be from “myGov” and include screenshots of the myGovID app.
The email asks people to click a link to verify their identity using a “secure form” which takes them to a fake myGov page requesting personal identifying information and banking details.
ATO Assistant Commissioner Ben Foster said this new phishing scam contains classic warning signs that it is not legitimate, for example, asking people to click a link to confirm their details and spelling errors.
Learn more: How to protect yourself from phishing scams
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