Investing in ATO compliance – The 2025 Federal Budget

The 2025 Federal Budget has allocated nearly $1 billion towards strengthening tax avoidance and compliance measures. A significant portion of this funding will support the Tax Avoidance Taskforce, which is dedicated to ensuring that Australia’s largest taxpayers, including multinational corporations, contribute their fair share.

The remainder has been committed to the following areas:

• Combatting Shadow Economy Activities – addressing under-reported income, labour exploitation, and illegal business practices.

• Personal Income Tax Compliance – targeting individual non-compliance, such as overclaimed deductions.

• Tax Integrity Program – enhancing engagement with medium to large businesses to ensure timely payment of tax and superannuation.

These measures aim to create a fairer and more transparent tax system while reinforcing trust within the business community. Beyond compliance, they also promote a level playing field—ensuring that businesses operate under the same rules when it comes to wages, superannuation, and employee entitlements. When everyone follows the same standards, businesses compete on service and efficiency rather than non-compliance.

For example, if all businesses are remunerating their staff appropriately by using the correct rates of pay, actually paying superannuation entitlements, and providing the correct amount of leave, then wage cost structures in their respective industries would be expected to be similar. All else being equal, this reduces the ability of certain industry players to undercut their competitors. This is obviously a simplistic view of costings, but it highlights how those that don’t play within the rules have an unfair advantage.

Where can we help you as your accountant and advisor? We can assist in reviewing your systems and software (accounting, payroll, etc) to ensure your business is complying as required. We can advise and train you on what you legally can claim as either business expenses or personal tax deductions so in the event of an ATO review or audit, you can feel comfortable that you are “playing within the rules”.

If you have any questions about the 2025 Federal Budget or any other matter, please contact your local PKF team.