The 2025–26 Australian Federal Budget includes nearly $1 billion in additional funding for the Australian Taxation Office (ATO) to ramp up tax compliance activity.
With increased scrutiny on tax avoidance, the shadow economy, and personal income tax compliance, accountants and their clients are more likely than ever to be contacted by the ATO.
This budget significantly reinforces the ATO’s compliance initiatives, particularly targeting high-risk areas such as multinational tax practices, the shadow economy, and personal tax compliance.
In the 2025–26 Australian Federal Budget, the government has allocated significant funding to the ATO to enhance tax compliance efforts:
Total additional funding:
💸 $999 million over four years to expand tax compliance activities.
Tax avoidance taskforce:
💼 $717.8 million over four years from 1 July 2025 for a two-year expansion and one-year extension. Focus remains on multinationals and large taxpayers.
Shadow economy compliance program:
🏚️ $155.5 million to address under-reporting of taxable income, worker exploitation, unfair competition from non-compliant businesses, and more.
Personal income tax compliance program:
👤 $75.7 million for proactive, preventative, and corrective measures targeting individual taxpayer compliance.
Tax integrity program:
🔒 $50 million over three years from 1 July 2026, ensuring timely tax and superannuation payments by medium and large businesses and wealthy individuals.
The bottom line:
For accountants, the increased ATO funding for tax compliance means one thing: more audits, reviews, and investigations. Not just for large corporations but also for small businesses and individuals.
Audit Shield covers accountants’ professional fees incurred when responding to ATO audits, reviews, and investigations. No out-of-pocket expenses for clients = no billing disputes for accountants.
Audit Shield:
✔️ Covers a wide range of ATO, state, and government revenue authority audits.
✔️ Applies to businesses, individuals, and SMSFs.
✔️ Ensures accountants get paid for their time in responding.
Audit Shield is a must in today’s compliance landscape!
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