Tax debts climb 20 per cent in a year

Individuals, and to some extent businesses, continue to use the Australian Taxation Office as a pragmatic source of credit.

Tax debts owed to the Tax Office increased by 20 per cent to $14.7 billion in the year to June 2010, the annual report for the ATO shows.

Of this income tax debt increased by a third to $5.6 billion. Activity statement debt increased 13 per cent to $8.7 billion.

The Tax Office is owed another $3.9 billion from insolvent taxpayers that it is unlikely to collect.

The number of people and businesses owing what the ATO labels "collectable debt" increased 11 per cent to 1.5 million over the year.