The ACT government will crack down on tax evasion, spending $5.7 million over four years to hire investigators and set up a new specialist team in Treasury.
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The team will focus on data matching, and one of the main targets will be companies evading payroll tax.
Chief Minister and Treasurer Andrew Barr hopes to reap $27 million over four years from the crackdown, to be funded in the June 7 budget.
The number of compliance officers in the government's revenue office will be boosted from 22 to 32.
Mr Barr said the tax crackdown would target a range of taxpayers in a variety of circumstances – those who might not be aware of their tax obligation, those who haven't advised the revenue office of changed circumstances, and those deliberately avoiding their tax obligations by putting in place "sophisticated arrangements".
These include businesses who push their payroll below the tax threshold by claiming what is effectively a single business as a number of smaller businesses. Payroll tax currently kicks in when a business has a wages bill of $1.85 million, so businesses which can get their wages bill below the threshold don't pay any of the tax.
But there will also be a payroll tax sweetener in the budget, with Mr Barr lifting the threshold at which companies must start paying the tax to a payroll of $2 million.
Payroll tax is enormously important to the budget. The government collected $358 million from the tax in 2014-15. This year, it expects to take in $422 million, with payroll tax set to overtake rates to become the single biggest ACT government tax.
Mr Barr said most Canberrans were "already doing the right thing and paying the right level of tax". But they were being "ripped off by companies and individuals that don't pay their fair share. This isn't fair and it has to stop".
The new specialist team in the revenue office would bring programming, maths and statistical skills to bear on tax evasion. It would also allow the office to take advantage of its new $30 million IT system funded in last year's budget to identify non-compliance.
The June budget will also include a new five-year tax plan, in which Mr Barr will set out the next step in his 20-year phase out to stamp duty on property sales and taxes on insurance, a program begun in 2012. The lost revenue is being made up in annual increases to rates.
But with an average 42 per cent rates increase after the first four years beginning to bite, Mr Barr signalled a possible slowdown in his tax reform last year, saying the phase out of stamp duty might take "a number of decades".
