Australian tax office sees sharp rise in complaints amid intensified debt collection

In the six months ending September, the Tax Ombudsman received 2,376 complaints about the Australian Taxation Office, marking a 74% rise from the previous year and a 180% increase over two years ago. Debt-collection and payment-related issues each accounted for 19% of the investigations during that period. Ruth Owen, the Tax Ombudsman, said the surge reflects taxpayers' financial distress and the ATO's intensified efforts to reduce its $54.2 billion debt book.

Of the 501 complaints the Ombudsman investigated, the agency judged the ATO's actions reasonable in 63% of debt-collection cases, a nine-point drop from last year. Penalty and interest grievances also rose, now representing 18% of complaints. Small businesses face $35.9 billion in tax debt, up $19.4 billion since 2018, and recent policy moves, such as banning credit-card payments, have strained relations with the business community, according to Andrew McKellar of the Australian Chamber of Commerce and Industry.