There is legislation currently before Parliament that proposes measures allowing the Tax Office to disclose the tax debt of a taxpayer to credit reporting bureaus.
This legislation has been fiercely debated since 2013, but the Government has now signalled support for it and it is likely to pass sometime this year.
This means that if the taxpayer has tax returns or activity statements overdue for lodgement or have failed to pay their taxation obligations on time, then this could affect the taxpayer’s credit rating. These new measures could affect applications for credit cards, personal loans, car finance or even housing loans.
Please note the proposed legislation is prospective, not retrospective, meaning that past indiscretions will be disregarded. Only future indiscretions will be reported. Given this we recommend people keep up to date with any tax debts or lodgement declaration within ATO time frames.
If you believe you will not be able to meet your tax obligations, we recommend you contact us so that we can make an arrangement with the ATO which may prevent this information from being reported to credit rating agencies. It may be worthwhile discussing this with our younger generation so that they don’t jeopardise their credit rating for future finance needs.