Equifax has forged an agreement with the Australian Taxation Office (ATO) to receive commercial tax default data, with the intention of integrating this information in its commercial credit reports.
Including commercial tax default data in Equifax reports will allow customers to evaluate risk more accurately by providing them with actionable data during the credit application process that was previously not available.
Commercial tax default data “will be incredibly valuable to our customers, as it’s widely understood that tax debts are often the last ‘bill’ that businesses typically pay,” said Scott Mason, general manager commercial and property services at Equifax. “This means that outstanding tax debts indicate either an inability to pay, or a wilful decision not to pay tax – both indicators of risk that our customers will now have greater oversight of. This new data stream will help not only our commercial customers, but anyone who uses Equifax insights.”
As of June 30, 2021, ATO had approximately $38 billion in collectable debt, with small businesses accounting for $24.3 billion of this debt. With the ATO looking to step up collection after a grace period during COVID, it is crucial for organisations to understand a company’s tax information if they want to manage their credit risk in relation to new and existing customers.
The ATO may report a business tax debt to credit reporting bureaus if the business:
Taxpayers with tax debts are encouraged to speak with their registered tax practitioner or call the ATO at 13 11 42. More information is available on the ATO’s website.
