The Australian Taxation Office (ATO) will later this year detail the gap between the superannuation guarantee (SG) contributions which should have been made by employers on behalf of their employees, and those which were actually made.
The ATO’s intentions were flagged to the Tax Institute by deputy commissioner of superannuation, James O’Halloran, and assistant commissioner of public groups and international, Peter O’Reilly, with the officials stating that the tax office later this year plans to use its annual report to detail a number of direct and indirect tax gap estimates.
They said these would include gap estimates for super guarantee contributions and Australian Prudential Regulation Authority (APRA)-regulated income tax.
“In relation to the SG gap estimate, this will not be a direct indicator of operational effectiveness, but a high level gauge and long term estimate of the difference between the amount of SG contributions required to be paid under the Superannuation Guarantee (Administration) Act 1992 and actual SG contributions made,” the ATO officials said.
They said the gap would consist of both non-payment and underpayment of SG obligations with the large funds income tax gap being the difference between the estimated amount of an income tax liability or obligation payable assuming full compliance with the law, and the amount actually reported and collected by the ATO for a defined period.
The officials said employer compliance underpinned the operation of the SG system and that while most employers paid the right amount for their employees and contributed on time, the ATO did need to “identify and address the drivers that cause SG not to be paid”.
“We need to work closely, and with employers directly as we all have a role to support the retirement savings of Australians,” they said.
“It is critical for community confidence in the system that employers do the right thing. Where we see employers struggle it is important that we assist and support them to meet their SG obligations in a timely and fulsome way.”
