If you’ve spent time scrolling through social media lately, you might have come across videos or posts promising a ‘secret’ way to avoid paying tax in Australia.
Some so-called ‘fin-fluencers’ and self-styled ‘sovereign citizens’ are claiming there’s a legal loophole that could save you thousands—up to $24,097, the average amount paid by Australian workers in federal taxes last year.
But before you get too excited, the Australian Taxation Office (ATO) has issued a stern warning: following this advice could land you in serious hot water.
The latest wave of misinformation started when a woman on social media noticed the word ‘voluntary’ on some ATO documents. She posted a video suggesting that, according to the Australian Constitution, paying tax is actually optional.
‘It is an agreement that you signed up to… [The ATO] can impose the tax when you have the tax file number, and if you look at Section 55 of the Constitution, it states that the ATO is responsible for the imposition of taxes, whether or not someone chooses to be a taxpayer, still is voluntary,’ she said.
Her video quickly racked up more than 57,000 views, with many viewers eager to find out how they could supposedly opt out of paying their fair share.
The ‘sovereign citizen’ (or ‘SovCit’) movement is a fringe group whose followers believe they can pick and choose which laws to obey. In Australia, this has led to people refusing to pay taxes, ignoring traffic laws, and even resisting arrest by claiming police have no authority over them.
The Australian Federal Police have warned that these beliefs are not only false but can also lead to legal trouble. When it comes to taxes, the ATO is crystal clear: ‘Tax is not voluntary.’ Claims that you can opt out of the tax system or that the ATO has no legal standing have been ‘repeatedly debunked’ and can result in significant penalties.
If you decide to take the advice of these online ‘experts’ and skip your tax return, you could face serious consequences. These include fines of up to $1,650 for failing to lodge a tax return, criminal prosecution if you deliberately avoid your obligations, and in the most serious cases, imprisonment for up to 12 months.
The ATO has made it clear that they take tax compliance seriously, and they have the power to enforce the law. Last year alone, Australians paid a record $802 billion in taxes—a figure that helps fund essential services like healthcare, education, pensions, disaster relief, and infrastructure.
You might be wondering why the ATO uses the word ‘voluntary’ at all. According to the ATO, ‘voluntary compliance’ simply means that most Australians do the right thing and pay their taxes without needing to be chased or threatened. It does not mean that paying tax is optional.
The law is very clear: if you earn income in Australia, you are required to report it and pay the appropriate amount of tax. The ATO’s spokesperson explained, ‘References on the ATO website to ‘voluntary compliance’ have been deliberately or inadvertently misconstrued. They refer to the fact that most Australians understand, recognise and meet their tax obligations as imposed by law.’
With so much misinformation floating around, it’s important to be cautious about where you get your financial advice. If you’re ever unsure, it’s best to check directly with the ATO or speak to a registered tax agent.
Have you seen any strange tax advice online? Or do you have tips for making tax time easier? Share your experiences and questions in the comments below—let’s help each other stay safe and informed!
Also read: Are you falling for this tax claim mistake? ATO urges caution
I wish that the Multinational Corporations with their Multi Billion Dollar Profits would pay their share of Tax in Australia, then the Tax System would not be so dependent on the Personal Tax Payer !!!!