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ATO Crackdown: Shadow Economy Prosecutions Jump 80% – $2.7M in Fines

22 Sep    Uncategorised

The ATO announced an 80% jump in non-lodgment prosecutions over the past 2 years targeting shadow economy operators, leading to more than $2.7 million in fines.

The shadow economy refers to people or businesses doing the wrong thing – not paying the right tax or super, demanding cash payments, or workers missing out on entitlements.

The numbers over the last 2 years:
– 350+ individuals and entities successfully prosecuted
– 305+ convictions secured – up almost 60% between 2024-25 and 2025-26
– QLD, NSW and WA accounted for almost 75% of prosecutions: QLD 28%, WA 26%, NSW 20%

ATO Assistant Commissioner Tony Goding warns: “It doesn’t matter if you’re a tradie, hairdresser or café owner – if you deliberately avoid paying the right tax, you risk more than financial penalties. A criminal conviction can impact your reputation, business viability, ability to travel overseas, and ability to borrow or obtain insurance.”

Lodging tax returns is a legal obligation, not a choice.

If you are behind on lodgements, BAS or super, now is the time to get back on track before the ATO takes action.

Source: https://www.ato.gov.au/media-centre/out-of-the-shadows-shadow-economy-prosecutions-jump-eighty-per-cent
General info only. This is not personal tax advice. Tax laws change. You should seek advice specific to your circumstances from a registered tax agent before acting.