Moula: Proposed tax reform likely to push businesses away from ‘Bank of ATO’

By Tom Watson · · 3 min read
Fact Checked
Advertiser disclosure

Australian businesses that fail to cooperate with the Australian Tax Office (ATO) in paying back substantial tax debt could have their information shared with credit reporting agencies under new reforms proposed by the Federal Government. 

Presented to parliament by Assistant Treasurer, Michael Sukkar, late last month, the Treasury Laws Amendment (2019 tax integrity and other measures) bill would allow the ATO to pass on tax debt information of non-cooperating businesses to credit reporting agencies - potentially affecting credit scores. 

However, the new laws would only apply to businesses: 

       •  With tax debt that totals over $100,000 and is overdue by 90 days

       •  That aren’t engaging with the Tax Commissioner or legally appealing the debt

"The Morrison government is introducing changes that will amend the tax legislation to stop tax avoidance, protect the integrity of Australia’s tax and superannuation systems, and save businesses time and money through implementing an electronic invoicing framework," said Sukkar.

"This will reduce the unfair advantage obtained by businesses who do not pay their tax debts and will encourage businesses to engage with the ATO to manage their tax debts."

Beyond the ‘Bank of ATO’

So just how common is it for Australian small businesses to be holding a tax debt? 

ATO figures published in the Sydney Morning Herald last month revealed that small businesses made up 800,000 of the 1.1 million tax debt payment plans undertaken by taxpayers in the 2017/18 financial year. 

That’s backed up by figures provided by online business lender Moula. Moula found that 40% of businesses with one of their loans were engaged in some sort of tax payment arrangement with the ATO. 

And according to Moula CEO, Aris Allegos, if the proposed reforms do come into practice businesses are likely to look for funding alternatives to the ‘Bank of ATO’ rather than risk damage to their credit scores. 

                                                                       (Image: Moula CEO, Aris Allegos)

“The Federal Government’s crackdown on businesses failing to pay significant tax debts by disclosing them to credit reporting agencies is likely to prompt risk-averse business owners to move quickly in seeking alternative funding to avoid being referred to credit reporting agencies,” he said. 

“The ATO has long been viewed anecdotally as the fifth largest SME bank in Australia, with tax debt used pragmatically as a form of affordable working capital. But the new rules flag the end of an era for businesses who allow their tax debts to run up over $100k and past 90 days without engaging with the ATO.”

Interested in giving your opinion? As part of the consultation process businesses and other parties have until August 21 to submit comments and responses to the proposed changes.

RELATED: 4 small business tips to kickstart the 2019/20 financial year

Until then, catch up on the new 2019/20 financial year small businesses tax changes, or if your business is in need of some extra funding to buy new equipment, hire staff or finance debt then check out the hot business loans deals below.

Compare business loans 2019

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can search our database of 81 products
Last updated 29 May 2025Important disclosures

Refine the list of business loans

Let’s help find you a great business loan...
  • About ScotPac
    Boost Business Loan

    Whether you’re looking for a quick cash boost for your business or are ready to invest in growth, ScotPac offers a range of unsecured and secured loans from $10,000 up to $500,000. For loan terms of 6 months to 3 years. No application or account keeping fees to pay. Funds available in 24 hours or less once approved. Repayment options available.

    Interest Rate
    Upfront Fee
    Funding speed
    On application
    Details on application
    From 24 hours
    Go to site
    Details
  • About Prospa
    Prospa Plus Business Loan

    Prospa uses risk-based pricing to determine your interest rate. They look at factors including your industry, years in business, cash flow, creditworthiness and the overall financial health of your business.

    Interest Rate
    Upfront Fee
    Funding speed
    Interest rates vary based on risk.
    3.5%
    from 24 hours
    Go to site
    Details
  • About Bizcap
    Unsecured Business Loan

    Business Loans from $5,000 to $5,000,000 with high approval rates. Access to funds on loans up to $500,000 in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
    Go to site
    Details
  • About Regional Australia Bank
    Mortgage Secured Commercial Loan

    Use your property as collateral to meet your business needs. Offers repayment terms up to 30 years for residential security and 15 years for commercial/rural security. Provides interest rates that are tailored to your business needs. Choose from Principal & Interest, Interest Only, or Interest in Advance repayment options.

    Interest Rate
    Upfront Fee
    Funding speed
    On application
    On application
    Varies
    Find out more
    Details

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.