Measures will be enacted to ensure that taxpayers will not be able to claim deductions for payments to their employees such as wages where they have not withheld any amount of PAYG from these payments, despite the PAYG withholding requirements applying.
Similarly, the Government intends to remove deductions for payments made by businesses to contractors where the contractor does not provide an ABN and the business does not withhold any amount of PAYG (again despite the withholding requirements applying).
This was recommended by the Black Economy Taskforce.
The revenue expectations linked with this expenditure is quite modest, ie “a small unquantifiable gain to revenue over the forward estimates period”.
Date of effect – The measure will commence on 1 July 2019 (ie next year).
Source: Budget Paper No 2 [p 24]