In the 2018 Federal Budget, the Government announced it will introduce a limit of $10,000 for cash payments made to businesses for goods and services from 1 July 2019. As part of implementation the Government will consult on the detail of this measure.
Currently, large undocumented cash payments can be used to avoid tax or to launder money from criminal activity. This measure will require transactions over a threshold to be made through an electronic payment system or cheque.
Transactions with financial institutions or consumer to consumer non-business transactions will not be affected.
This action was recommended by the Black Economy Taskforce in order to tackle tax evasion and money laundering.
[Treasury website: Budget Paper, Part 1 – Revenue Measures, p23; Tax Month May 2018]
Study questions (answers available)
- Will the Government legislate for a $10,000 cap on cash payments?
- Will this affect consumer to consumer to consumer, non-business transactions?
- Will the permitted method of payment, after the $10k prohibition is legislated, include cheques (as well as electronic payment)?
