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The federal government has unveiled new legislation aimed at increasing the transparency of business tax debts, which could be a win for small businesses engaging with suppliers.
Minister for Revenue and Financial Services Kelly O’Dwyer released draft legislation which proposes authorising the ATO to disclose business tax debts to credit reporting bureaus where the businesses have not effectively engaged with the regulator to manage their debt.
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With few exceptions, the legislation will apply to businesses with a minimum of $10,000 owing for 90 days or more. It is effectively the same level of transparency that is available to a bank.
This legislation at its core intends to target phoenix operators and businesses that are at risk of ceasing production. In effect, this should assist small businesses in engaging with companies that are unlikely to ever fulfil their payment obligations.
“Improving transparency by making overdue tax debts more visible will provide businesses and credit providers with a more complete assessment of the creditworthiness of a business,” Minister O’Dwyer said.
“This will reduce the unfair advantage obtained by businesses that do not pay overdue tax debts and encourage businesses to engage with the ATO to manage their tax debt.”
The exposure draft legislation and explanatory materials are available on the Treasury website, and interested stakeholders are being asked to submit their views on the materials by Friday, 9 February 2018.
[Related: New banking code of practice could benefit small businesses]
