The Australian Taxation Office (ATO) has reached a significant milestone, having received over 300,000 community tip-offs regarding potential tax evaders since it introduced its public whistleblower service in 2019. This initiative has empowered citizens to report suspicious activities, contributing to a broader effort to curb tax avoidance.

In the most recent financial year, nearly 50,000 Australians stepped forward with information about possible tax dodgers. This demonstrates a growing public awareness and engagement in tackling financial misconduct.

A vast majority of these reports focus on activities within the “shadow economy.” According to the ATO, this includes scenarios where individuals request cash payments for services or inaccurately report business expenses. These practices are not just harmful to honest taxpayers but also impact the economy at large.

The ATO estimates that such illicit activities siphon off billions of dollars, funds that are crucial for essential public services such as healthcare, education, and infrastructure development. The loss of this revenue puts additional strain on the country’s resources.

Expressing concern over these practices, ATO Assistant Commissioner Tony Goding emphasized that businesses neglecting their tax and superannuation responsibilities are essentially stealing from their fellow Australians. This strong statement underlines the ATO’s commitment to ensuring fairness and accountability in the tax system.

“When someone cheats the system, they’re not just breaking the law, they’re freeloading on honest businesses and the rest of the community,” Goding said. 

“Paying tax is not optional.

‘Sooner or later, and probably sooner, if you’re operating in the shadow economy, the ATO will discover this… as a result of a tip-off from one of your workers, customers or competitors.”

Industries with the most tip-offs

The top three industries seeing a surge in tip-offs this year are building and construction, cafés and restaurants, and hairdressing and beauty services.

Goding noted that the sources of these reports are often very close to the businesses themselves. 

“With tip-offs often coming from customers, employees, other businesses, and even family and friends, the community is clearly fed up with dodgy behaviours and is stepping up to help us make things fairer,” he said. 

Australians have been reporting businesses and individuals who didn’t declare their income, demanded or paid for work in cash to avoid tax, or failed to report all sales.

Where have the most tip-offs come from?

Community vigilance is widespread across the country, but some areas are more active than others. 

In 2024–25, NSW residents led the charge, recording 15,907 tip-offs to the ATO, followed closely by Victorians with 11,890 and Queenslanders with 10,630.

While Sydney and Melbourne topped the charts for total tip-offs, suspicious activity is not confined to the major capital cities. 

The top five regional areas for tip-offs this year included a strong presence from Queensland: Robina; the Sunshine Coast Hinterland; Townsville; and Toowoomba.

Newcastle in NSW topped the regional list.

“From coastal towns to inland hubs, communities are calling out suspicious behaviour and helping the ATO crack down on the shadow economy,” Goding said. 

The tip-offs the ATO receives have proved to be remarkably accurate, with 85 per cent of those analysed in the last financial year found to be suitable for further investigation.

Australians were becoming more savvy about what constitutes a red flag, the ATO said.

It’s not just “cash only” signs that should raise eyebrows, but broader lifestyle and operational anomalies. 

Suspicions being flagged could include a luxury car parked outside a business that claims to be struggling, a busy café that never seems to report profits or employees, or workers being paid entirely in cash without payslips or superannuation entitlements.

“People evading their tax and super obligations are directly harming honest businesses and putting an increased burden on other Australians. There really is no excuse,” Goding said. 

“And when you’re caught, you don’t just have to cough up the tax.

“You’ll also face significant penalties plus interest on unpaid taxes and possibly even criminal sanctions.”