The Federal Government has released an exposure draft of a new Bill on taxation and superannuation guarantee integrity measures. The Bill requires all employers to implement Single Touch Payroll (“STP”) reporting, grants the Australian Taxation Office (“ATO”) stronger enforcement powers, and sets out when new offences may have been committed.

STP reporting

Currently the STP reporting framework comes into effect from 1 July 2018 for entities with 20 or more employees. The STP is intended to facilitate the ATO in detecting, monitoring, and preventing the non-payment of superannuation. The technology enables and requires employers to provide the ATO with real-time reporting of superannuation and payroll information, such as withholding payments, employee wages, and superannuation contributions.

The Bill introduces additional reporting requirements, and will extend the STP rules to all employers from 1 July 2019. This will provide the ATO with greater visibility and address the “significant proportion” of superannuation guarantee non-compliance attributable to small businesses. This was one of the recommendations of industry and government reports in 2016 and 2017. The reports called for additional resources and powers for the ATO to ensure employer compliance with superannuation guarantee obligations and to recover unpaid entitlements.

New enforcement and compliance measures

The Bill gives the Commissioner of Taxation the ability to direct an employer to:

• pay unpaid and overdue superannuation guarantee charge liabilities;
• undertake educational courses relating to superannuation guarantee obligations; and
• provide a court ordered security deposit for the payment of existing or future tax related liability.

The Bill also allows the Commissioner to disclose a current or former employer’s suspected non-compliance to an affected party.

Offences

With some exceptions, the Bill creates offences for the failure to comply with the directions set out above.

Notably, an employer is not exempt from administrative penalties and/or criminal liability even if it took all reasonable steps to comply with the direction to pay, if the employer cannot establish that all reasonable steps were also taken to discharge the liability before the direction was made.

Before issuing a direction to pay, the Commissioner of Taxation must consider the employer’s history of compliance with taxation laws, the steps the employer has taken to discharge or dispute the unpaid liability, and whether the amount is substantial, having regard to the size and nature of the business.