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.

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 19 January.

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

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.

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