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Draft legislation increases small-business rights to contest ATO debt recovery action

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has welcomed draft legislation from government that would increase the rights of small businesses to contest the ATO’s collection of disputed tax debt.

Business Neil Griffiths 19 January 2022
— 1 minute read

This week the government called for feedback on the draft legislation that outlines a number of amendments to the Taxation Administration Act 1953 to allow the Administrative Appeals Tribunal (AAT) to pause or modify the Commissioner of Taxation’s debt recovery actions and enable small businesses to seek AAT orders that prevent the Commissioner from taking debt recovery actions.


Under the legislation, the AAT would also be empowered to order the Commissioner of Taxation to offer instalment arrangements including 50/50 payment arrangements and to accept security in lieu of immediate recovery.

An ASBFEO spokesperson told ifa that the legislation reflects its recommendations to government released in a report last year that called for the ATO to be prohibited from charging penalties and interest while there is a dispute about a debt.

In the report, the ombdusman called for the ATO “to be prohibited from charging penalties and interest, issuing garnishee notices or instigating other recovery action on tax debt arising from a decision that is disputed until all avenues of appeal taken by the small business taxpayer are exhausted…”

“The proposed changes are a positive step in this direction,” the ASBFEO spokesperson said.


Responses to the government’s draft legislation can be submitted up until today (19 January).

Draft legislation increases small-business rights to contest ATO debt recovery action
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Emma Ryan

Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media and editor of the company's legal publication, Lawyers Weekly.

Emma has worked for Momentum Media since 2015 and has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.

A journalist by training, Emma has spent her career connecting with key industry stakeholders across a variety of platforms, including online, podcast and radio. She graduated from Charles Sturt University with a Bachelor of Communications (Journalism).