Tax boss urges Australians to stop paying tradespeople in cash
The boss of the Australian Taxation Office (ATO) has called on Australians to stop paying tradespeople in cash.
Chris Jordan said that paying laborers cash for a discount was taking "billions of dollars" out of the economy which could be spent on schools, hospitals and roads.
Cash income is less likely to be declared by tradespeople, Jordan said, meaning that no tax would be paid on that income.
It is common in Australia for tradespeople to offer discounts for services rendered if they are paid in cash.
"Stop paying cash for a discount," Jordan told News Limited on Friday.
"If you pay cash for a discount, in many cases you are effectively ripping off yourself as an Australian taxpayer, because this type of behavior is what sees billions flow out of the tax system and into the cash economy."
Jordan's comments came the day after an ATO report tabled in parliament on Thursday revealed that 37 percent of multinational corporations with operations in Australia paid no tax in Australia in the 2015-16 financial year.
Included in those that paid no tax were defence contractor BAE Systems, pharmaceutical giant Pfizer and bookmaker Crownbet, which is owned by Australian James Packer.
The report said that the amount of corporate tax paid in Australia fell 8.7 percent from 31.5 billion U.S. dollars in 2014-15 to 28.7 billion U.S. dollars the following year.
But the ATO said that the fall in tax revenue was "almost entirely" due to the decline in iron ore price rather than companies avoiding tax.
"The significant reduction in tax payable was overwhelmingly driven by the energy and resources segment, reflecting a decline in the average Australian dollar prices for iron ore and coking coal of 16 percent and 10% percent, respectively," the report said.
"Results were relatively steady among other industry segments."
Activist group Tax Justice Network Australia refuted the ATO's finding, saying tax avoidance was rife in Australia.
"There are still companies ... hiding among those that have legitimately made a loss or have legitimate deductions," spokesperson Mark Zirnsak said.
The government has failed to address the issue they themselves have identified, where an increasing number of corporations are restructuring to be "stapled securities" to avoid having to pay tax in Australia.