The Black Economy Taskforce and New Compliance Measures
Since October 3, 2018, it has been illegal to produce, supply, use, or possess electronic sales suppression tools (ESSTs). This law stems from the Treasury Laws Amendment (Black Economy Taskforce Measures No. 1) Bill 2018, introduced on February 7, 2018, and passed on September 18, 2018 (Act 121, 2018).
The government introduced this measure to “clean up business practices” and “promote good tax behaviors” as part of the Black Economy Taskforce initiated by the Turnbull Government. In the 2017 Budget, $32 billion was allocated to the ATO to extend audit and compliance efforts.
Penalties and Support for Small Businesses
Small businesses have until April 3, 2019, to voluntarily disclose their use of sales suppression POS machines to the ATO. By coming forward, businesses can avoid penalties and only pay the shortfall tax—provided they meet specific conditions. For personalized guidance, contact Ashfield Sydney’s trusted accountants and tax agents at 0410-829-900 or email John at Jc@endurego.com.
Schedule 1 of the Amendment in Subdivision BAA defines ESSTs as devices or software designed to falsify, manipulate, hide, destroy, or prevent the creation of records required under taxation law. A reasonable person would recognize that these tools’ primary function is to conceal or manipulate records created by electronic POS systems.
Using, producing, supplying, or possessing ESSTs is a serious offense, with penalties reaching up to 5,000 units ($1 million). These technologies allow businesses to manipulate or destroy selected transactions, understate income, and evade taxes.
If you use a POS system and are unsure about compliance or potential risks under these regulations, our team in Ashfield Sydney can review your business practices and help you mitigate audit risks effectively.
