While Ai Group has important concerns with the Tax Administration Amendment (Combating Wage Theft) Bill 2021 (the Bill), we note at the outset that Ai Group regards the theft of wages (properly defined) and the evasion of taxes as offensive and we support strong, targeted legislative measures and penalties and effective enforcement. While these issues go to general issues of fairness for taxpayers and employees, they also relate to the fairness for businesses who want to see that their competitors do not obtain an advantage by evading taxes or deliberately underpaying their employees.

Ai Group has three recommendations in response to the Bill:

The case for an increase in general tax penalties of the size proposed in the Bill has not been made. We also submit that a case has not been made for the creation of the proposed new offence of tax evasion. There may well be merit in an alternative bill that
either increased the penalty points that applied to the relevant offences (by about 80 per
cent) or that increased the monetary value of a penalty point by 80 per cent. If such a bill
were to be pursued, in the interests of transparency and following the principle of calling a
spade a spade, it could be titled the Tax Administration Amendment (Increase in Tax Penalties) Bill 2021.

In light of the fact that payroll tax liabilities relating to wages theft can already be reassessed beyond the five-year period, Ai Group submits that the additional scope for extending the period of reassessment proposed by the Bill is not needed.

We submit that the distinction between wages theft and inadvertent wages underpayment
should be reflected in the Bill and the provisions of the Bill that relate to naming of taxpayers and the sharing of information should be rewritten to ensure they only apply in the event of a deliberate underpayment of wages.