Tax complaints skyrocket as Aussies take issue with ATO debt collection

• Complaints about the Australian Tax Office (ATO) have skyrocketed in the last six months as Australians complain about the way the tax office collects debt.
• New statistics from the Tax Ombudsman shows in the six months to September 2026, complaints rose by 74 per cent.
• More than 2,300 complaints were made, primarily about the interest charge applied to tax debts.

Complaints about how the Australian Tax Office (ATO) handles debt have skyrocketed in the past six months as Australian businesses and households grapple with the soaring cost of living.

New statistics from the Tax Ombudsman, the agency that oversees the tax office, revealed it received 2,376 complaints in the six months to September 2026.

The ombudsman said complaints rose 76 per cent over the same period last year and 180 per cent over the same period two years ago.

Tax Ombudsman Ruth Owen said many of the complaints were about how interest was being applied to debts owed to the tax office.

“We continue to see an unprecedented demand for our services,” Owen said.

“Our latest complaint data shows more people are struggling due to the ATO’s debt collection activity or interest charges or simply need to resolve delays to payments they are due.

“At a time when many Australians are facing financial distress, we are seeing increased complaints about how the ATO is collecting tax debt owed and how interest is applied to the debt, often making the amount due impossible to pay back.”

Debt collection and payment-related matters each accounted for 19 per cent of the complaints, specifically about the ATO’s general interest charge.

The general interest charge, or GIC, is applied to outstanding tax liabilities if they aren’t paid by the due date.

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GIC is calculated on a daily compounding basis on the amount overdue.

Owen said every statistic represented a person or small business asking for help.

“The concentration of complaints we’re seeing around tax debt, interest, missing superannuation, and delayed refunds indicates people are doing it tough at the moment, but they’re still trying to do the right thing and engage with the tax system,” she explained.

Despite the skyrocketing complaints, the ombudsman found that in 63 per cent of debt collection-related complaints, the ATO had acted reasonably.

Owen said action taken by the tax ombudsman had helped many Australians sort through complex tax matters, such as the death of a family member with outstanding debts.

“In payment complaints, matters where we helped speed up agency action rose from 4 per cent to 14 per cent. This included faster probate processing, where bereaved families are seeking to resolve outstanding tax matters,” she said.

“Where the ATO has not taken action or that action has been delayed, our intervention can deliver tangible outcomes such as expedited payments, decisions to remove or remit interest charges, reduction of debt owed or a fresh look at the person’s circumstances.”

Warning as tax deadline looms

Australians who lodge their own tax returns are being urged to prepare their finances, as they have only days to complete their return.

Typically, self-lodged returns are due on or before October 31.

Because October 31 lands on a weekend this year, that due date has been extended to November 2.

If a taxpayer chooses to engage a registered tax agent, they must officially begin business with them before November 2, but they do not need to lodge their tax return by that date.

If you lodge your own tax return yourself, and it results in a bill, you have until November 21 to pay it.

If you miss the deadline, the tax office will contact you, and there may be some leeway.

“We recognise that sometimes people don’t meet their lodgment obligations on time, even with the best intentions. Generally, we don’t apply penalties in isolated cases of late lodgment,” the ATO says online.

“We consider your circumstances when deciding what action to take.

“If you fail to lodge on time, we’ll warn you by phone or in writing before we apply an FTL penalty and issue you a notice to lodge. This will give you the opportunity to lodge or give you the opportunity to engage with us if you’re experiencing circumstances preventing you from lodging.”