Announced in the federal budget last year, the proposed measure looks to make it a criminal offence for businesses to make or accept a cash payment of $10,000 or more by introducing penalties of up to two years of imprisonment and a $25,200 fine.
The measure, which is slated to come into effect from 1 January 2020, comes as a result of the final report of the Black Economy Taskforce, which recommended that the government introduce such a measure to tackle tax evasion and other criminal activities.
The cash payment limit will apply to the total price of a single supply of goods or services, regardless of whether the price is split into a series of payments over time.
Payment not subject to the cash payment limit include payments related to personal or private transactions; payments that must be reported by an entity under anti-money laundering and counter-terrorism legislation; and payments made or accepted by a public official in which the public official is legally required to make or accept a cash payment in the course of their duties.
Further, cash-in-transit providers will be exempt from the cash limits, including payments that only exceed the cash payment limit because payment is or includes an amount of digital currency, and payments that occur in situations where no alternative method of payment could reasonably be used.
Where an entity is not a legal person, the bill provides rules to apply the consequences to an entity that has control over the action of the offending entity.
Treasury is currently welcoming feedback during the consultation phase until 12 August 2019.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.