The announcement of the amnesty comes ahead of the ATO’s plan to launch a “global crackdown” on international tax havens with the imaginatively titled ‘Project DO IT’ (‘Disclosure Offshore Income Today’).
Commissioner of taxation Chris Jordan said taxpayers need to get their affairs in order to avoid “steep penalties” and “the risk of criminal prosecution for tax avoidance”.
“As governments around the world step up their data sharing and harness powerful technology to find tax cheats, the concept of the 'tax haven' is dying. It's just a matter of time before you'll be caught,” he warned.
With increased information sharing between counties stemming from agreements at the G20, the “net is closing in on tax evaders around the world”, said Mr Jordan.
But according to Taxpayers Australia, there is now a “gaping hole” in the net.
“The more than generous nature of the lure being offered to disclose may leave the wider community gaping in disbelief,” said a statement by Taxpayers Australia.
“Taxpayers who take advantage of the amnesty will not only escape criminal investigation, but the tax office has promised that assessments will only be made on the last four years. It has also seen fit to further sweeten the deal by limiting the maximum shortfall penalty to a mere 10 per cent,” said the statement.
Taxpayers Australia head of tax Mark Chapman said he had “severe reservations” about the scheme.
“In particular, the low levels of penalties which those disclosing will suffer is a major concern, as is the fact that the Tax Office will only go back to levy taxes on the most recent four years,” he said.
“So, if you set up an offshore structure decades ago, haven’t paid a cent in tax in Australia and enter into this disclosure scheme, it looks like the Tax Office will let you off your obligations for all years except the most recent four,” said Mr Chapman.
There should be a level playing field when it comes to taxation, he added.
“All taxpayers should be treated equally and that no groups should receive beneficial treatment from the Tax Office, particularly not the ones who are rich enough and well advised enough to look after themselves,” he said.
