The Australian Tax Office has named the Sunshine Coast hinterland as the regional location from which it received the highest number of tips about people operating in the shadow (or black) economy.

Overall, Queensland ranked third in the number of tip offs received (9400) by the ATO behind NSW (13,400) and Victoria (11,500), but the Sunshine Coast ranked number one for places outside the capitals for the shadow economy activities the ATO said cost it about $11 billion a year. It describes the shadow economy as anything that operates outside of the tax and other regulatory systems.

Mostly it’s companies demanding cash from customers, or paying cash-in-hand or not declaring sales and the building and construction industry was the sector where it occurred most often, followed by beauty and hairdressing, cafes and restaurants, transport, management advice and consulting.

The top five regional locations for tip offs were the Sunshine Coast hinterland, Cairns, Wellington (NSW), Wodonga (Vic) and the Mornington Peninsula (Vic). Overall, Sydney had the highest number of tip offs (5600). The regions accounted for 7000.

The national tally of tip offs was 43,000 for the last financial year.

ATO assistant commissioner Peter Holt said the activities were not restricted to businesses. Customers also tried to dodge tax by demanding to pay in cash and ask for discounts to avoid tax and workers also often demanded cash-in-hand.

He said about 90 per cent of the tip-offs received by the ATO warranted further investigation or were retained for intelligence purposes.

“Sometimes that tip-off can be the final piece of the puzzle we need to act,” Holt said.

“We get tip-offs from other businesses, customers, members of the public, even employees.

“The surge in tip-offs tells us the community is not willing to let this behaviour slide anymore.”

The tell-tale signs of a business operating in the tax shadows were “cash only” signs, offering a discount for cash, not accepting card payments, failing to provide payslips to workers, not ringing up sales, or even running illegal software that deletes or modifies sales transactions.

“There’s a bit of a myth that Covid has fixed the shadow economy because people are using less cash. While this is true for some businesses, we know there is a lot of cash in circulation and it is being used in the shadow economy,” Holt said.

The ATO’s Operation Protego was a source of a lot of tip offs. The operation was an investigation into about $850 million in potentially fraudulent GST refunds using fake businesses.