They paid $9.3 billion in income tax and employed 780,000 people.
Of the $770 million shortfall in expected tax, the ATO believes 53 per cent is due to high net wealth individuals and the rest is due to their associated companies.
Deputy tax commissioner Tim Dyce said it was clear most high net wealth individuals and their companies complied with the nation’s tax laws while a small number made legitimate mistakes. There were a few who deliberately sought to avoid paying their tax.
He said from the start of the new financial year the ATO would be expanding the work of its tax avoidance taskforce with 200 extra staff to be employed. Next year another 100 people would be brought in.
“We have the resources to knock on every door,” he said.
The 7.7 per cent gap between what the ATO collects in tax from this group and what it expects to collect compares favourably with the 6.4 per cent gap for employees. Big business has a tax gap of 4 per cent while for small business it is 12.5 per cent.
The gap for the high net wealth group has fallen since 2011-12 when the ATO estimated it was 8.8 per cent, but it has increased marginally over the past year.
Mr Dyce said the ATO often picked up honest mistakes from private companies, noting many did not have large tax departments that were the norm for public firms.
But there were firms and individuals who deliberately sought to avoid their tax obligations.
“While we continue to observe a small number that are deliberately engaging in tax avoidance, we are confident that our compliance strategies are tackling the bad behaviour we see from higher-risk taxpayers and their agents,” he said.
“Access to sophisticated data and analytical tools has increased our ability to match data from Australian and off-shore institutions and regulators and means that those engaging in tax avoidance activities will be caught out.”
Mr Dyce said it was not just a small number of individual high net wealth people who were trying to avoid their tax, noting tax advisers were also an issue.
“We know a small number of tax advisers intentionally do the wrong thing by placing their high wealth private groups’ clients into risky and even illegal tax avoidance arrangements,” he said.
“These tax advisers and others who promote aggressive tax arrangements risk being subject to significant financial penalties and face the prospect of prosecution.”
Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.