Hidden Economy: Background Paper for Session 14 of the Tax Working Group

This background paper is for the Group’s information. The paper:

• Provides an overview of Inland Revenue’s understanding of the hidden economy, including its potential size, the types of economic activities normally carried out by hidden economy participants as well as the drivers and behaviours that would encourage a taxpayer to choose to operate in the hidden economy;
• Outlines potential policy, regulatory and administrative responses to the hidden economy;
• Provides an overview of Inland Revenue’s Hidden Economy Programme, including its key areas of focus and recent marketing campaigns;
• Briefly covers the Budget 2018 compliance initiative and potential opportunities to respond to labour non-compliance; and
• Briefly covers Australia’s recent Black Economy Taskforce and their recommendations.