Other tax measures

Key takeaways

Small and medium businesses will be able to opt in to monthly PAYG instalments calculated through ATO-approved software.
Funding to ATO and Treasury protect the tax system against fraud.
Treasury and the ATO to strengthen and streamline Australia's foreign investment framework.

ATO funding measures

The 2026–27 Federal Budget provides additional funding to the Australian Taxation Office (ATO) across three areas—modernising pay as you go (PAYG) instalments for small and medium businesses, a second phase of the Counter Fraud Strategy and a joint Treasury/ATO package to strengthen and streamline Australia's foreign investment framework:

PAYG monthly instalments—$10.9m provided to expand the ATO’s pilot of dynamic PAYG instalment calculations and to broaden access to monthly payments. From 1 July 2027, small and medium businesses can opt in to reporting and paying PAYG instalments monthly and to use an ATO-approved calculation embedded in accounting software to calculate and vary instalments. The ATO will remove interest charges for businesses that accidentally get their instalment variation wrong when using ATO-approved calculators. Taxpayers with a demonstrated history of non-compliance will be required to report and pay PAYG instalments monthly.
Protecting the tax system against fraud—$86.3m provided over four years from 1 July 2026, and $9.7m per year ongoing from 2030–31, to deliver Phase 2 of the Counter Fraud Strategy. The measures are to modernise the prevention and detection of fraud in the tax and superannuation systems and to strengthen the ATO’s ability to combat fraud committed by tax agents and other intermediaries. The ATO will undertake additional targeted compliance activities over the two years from 2026–27 to further address fraud in the system, including in relation to the Research and Development (R&D) Tax Incentive.
Streamlining Foreign Investment Framework approval processes—Treasury and the ATO will work together to implement measures including a new performance target to decide all low-risk applications within 30 days from 1 January 2027, the removal of ineffective conditions on existing approvals and reforms to foreign investment laws and the Register of Foreign Ownership of Australian Assets.

Extended ATO powers

As part of the package to protect the tax system against fraud, the ATO will be given powers to:

pause the recovery of tax debts of taxpayers who are victims of fraud by tax intermediaries, and to waive those debts in appropriate circumstances
recover those debts directly from the tax intermediaries, and
use expanded garnishee powers that include jointly held assets where such arrangements are being used to frustrate recovery actions.

The Government will also progress further targeted exceptions to tax secrecy and enhancements to tax regulators’ information-gathering powers to support integrity, compliance and effective administration of the tax system.

Combatting the illicit tobacco market

The Government has committed $20.3m in funding over four years from 2026–27 to disrupt the illicit tobacco market, strengthening of law enforcement powers with increased penalties and expanded capabilities to target illicit activities related to tobacco.

This Includes $14.0m for enhanced compliance and enforcement, $5.2m for data collection and monitoring, and $1.1m for international obligations.

Paul Cornick

Partner, National FTC and Excise Leader, PwC Australia

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Warren Dick

Tax & Legal Leader, Partner, PwC Australia