When the Australian Tax Office (ATO) calls, few taxpayers celebrate and bring out the fatted lamb. If any public service body has been likened to Orwell's all-dominating “big brother” from 1984, the ATO had no peer.

And in recent years, the country’s biggest big brother has actually got bigger, with our biggest companies that pay no tax receiving a new, invasive and bruising experience from the investigators at the Tax Office.

What’s the result? This is what The Australian’s David Ross has told us, with a little bit of help from the big brother’s press team:

1. The crackdown on companies and their tax advisers has meant the number of companies owing no tax has fallen to the lowest level on record.

2. Tax receipts from companies remain at near record levels.

3. Large companies paid more than $100bn in tax in the 2023-24 financial year.

4. That said, 28% of large companies paid no

tax in 2023-24, down from 31% in 2022-23.

5. This is the lowest number since the ATO has been collecting data on non-tax paying companies.

6. Around half of non-taxpayers were because of losses. If the losses are legitimate, no tax to pay is OK.

So, how come there has been such great results? Well, it looks like the ATO has tried common sense with tax dodgers!

Looking at the 4,110 companies with income over $100 million, ATO assistant commissioner Michelle Sams effectively explained that investigators used no-tax-to-pay assessments from accountants as a trigger to investigate. “Where we see no taxes paid, we investigate it carefully to make sure it reflects commercial circumstances.”

Yep, this looks like common sense. And this new, smarter approach to big company tax dodgers has meant multinational companies, miners and many using low tax countries such as Singapore, have come in for some big brother investigations.

Interestingly, the ATO is also hunting down high-end accountants who are seen as tax coaches and at least one high-profile bean counter has been banned by the Tax Practitioners Board.

Sams tells us that the ATO has a balanced approach to their inquiries. “We of course don’t look at things in silos, we look holistically at the market, we have good coverage across the entirety of the market and use intelligence available to us to take appropriate action.”

Once again, this is a common sense approach, which undoubtedly is being helped by what the computer and internet age has delivered to the ATO. But this holistic approach needs to be applied when all our tax collecting bodies at the federal and state levels start prowling for tax from smaller businesses.

Excessive spending by governments and growing budget deficits has resulted in some tax assessors being given carte-blanch to smash small business owners with unfair, falsely calculated tax bills, where the right of reply is only possible after the tax bill plus penalties plus interest of 10-12% is imposed and paid!

These tax investigators are presuming these small business owners are guilty and scam merchants. The small business has to prove otherwise, which is grossly unfair!

Only politicians can tell these tax collectors to play fair and legitimate investigations cannot become unreasonable interrogations!

While these small operators might have a tax problem, they’re also job creators, and they are actual tax collectors on wages and salaries, GST and super payments. Government tax bodies shouldn’t be ignorant of how their rough house tactics, often to collect incorrect tax amounts, could ruin businesses and kill future tax collections.

There is one thing you learn in business, which I’m sure non-business owners haven’t thought about because they’ve never had their house and wealth on the line. This is about the lifelong value of a client you keep.

Dumb business owners cancel some clients too easily, failing to see how ongoing revenue is given up because they fail to solve a problem rather than seeing it as a ‘make or break it’ situation.