The Morrison Government is protecting honest businesses by increasing integrity in Government procurement processes.
From 1 July 2019, businesses seeking to tender for Commonwealth Government procurement contracts over $4 million (inclusive of GST) must provide a statement from the Australian Taxation Office to show they have a satisfactory tax record. Draft guidelines on Government Procurement Policy, that include a description of the satisfactory Statement of Tax Record requirement, were released today.
The Government is leading by example and supporting businesses doing the right thing through the supply chain. This measure was announced in the 2018-19 Budget.
The requirement to have a satisfactory tax record was recommended in the Black Economy Taskforce final report, and aims to disrupt suppliers that are able to make more competitive bids at the procurement point because they have saved costs by not complying with their tax and superannuation obligations.
The public has been consulted on the criteria that are used to demonstrate a satisfactory tax record.
Stakeholders supported a phased rollout of the policy, where requirements will be limited in the first year to ensure smooth implementation.
Results from the first year will be assessed and used to refine guidance where required, and could for example lead to additional criteria being taken into account in determining a satisfactory tax record, such as whether the business has complied with its superannuation guarantee obligations, and whether the business or its directors have been convicted of tax evasion, phoenix activity, and bribery or corruption offences.
The draft guidelines are available on the Treasury website. Comments are welcome and should be forwarded to Treasury by 21 December 2018.