Australian Taxation Office Enhances Debt Collection Efforts, Implements Travel Bans

ATO Intensifies Debt Collection, Utilizes Departure Prohibition Orders

The Australian Taxation Office (ATO) is intensifying its debt collection efforts, which include preventing individuals with significant tax debts from departing the country. This initiative is part of a broader strategy to address billions of dollars in unpaid taxes. The ATO emphasizes that taxpayers with substantial outstanding debts, particularly those demonstrating a capacity to pay, should anticipate potential disruptions to their international travel plans if deliberate steps are taken to avoid payment.

The ATO is actively utilizing Departure Prohibition Orders (DPOs), which legally prevent individuals with tax debts from leaving Australia without settling their outstanding tax obligations. Since July 2025, 21 DPOs have been issued.

ATO Assistant Commissioner Anita Challen stated that taxpayers with significant debts who attempt to depart the country without fulfilling their obligations may face intervention. The ATO may issue a DPO if concerns arise that a taxpayer intends to leave the country or is allocating funds to overseas travel rather than debt repayment.

Challen highlighted the significant consequences of these orders, noting an instance where a taxpayer issued a DPO was prevented from boarding an international flight from Australia. She clarified that individuals with significant ATO debts and a DPO must pay or establish satisfactory payment arrangements prior to planning overseas travel.

In conjunction with the increased use of DPOs, the ATO has indicated an accelerated application of its powers to secure payments from taxpayers who have not met their obligations. These powers may include:

• Director penalty notices
• Garnishee orders
• Referrals to credit reporting bureaus
• Wind-up applications

The ATO's enhanced debt collection focus aims to reduce the current outstanding collectable debt, which stands at $50 billion. This figure represents nearly a doubling from the $26.5 billion recorded on June 30, 2019, with the debt growing at a rate the tax office describes as "out of pattern."

The ATO adopted a more flexible approach to payment during the COVID-19 pandemic and has observed that some taxpayers continue to prioritize other expenditures over debt repayment. Challen encouraged taxpayers unable to meet their obligations on time to engage with the ATO or consult their registered tax professionals early.