Unpaid business taxes detected by state government investigators have grown to reach more than $188 million this year, as the proportion recovered by its investigators and prosecutions falls.
Office of State Revenue documents released under freedom-of-information laws show $188 million in suspected non-compliance with payroll taxes was detected by its investigators last financial year. $115 million was recovered by the agency in the same year, a gap of more than $70 million.
The value of non-compliant payroll taxes detected each year has grown by more than 45 per cent over the past three years, from less than $130 million in 2013.
The proportion clawed back each year by investigators has also fallen from about 67 per cent, or $85 million in 2013 to 61 per cent last year.
Labor says this is proof the government is going easy on businesses and forgoing revenue.
Shadow Treasurer Ryan Park said: "The Government needs to investigate non-compliance properly and ensure money is being repaid and prosecutions are going ahead.
"Treasurer Gladys Berejiklian would be the first one to follow up a homeowner not paying stamp duty but is happy to let it slide when a business doesn't pay its payroll tax."
Over the same time, the number of prosecutions pursued by the agency for all kinds of non-compliance has more than halved. The Office of State Revenue mounted 12 prosecutions in 2012. Last year, this figure fell to just four.
But the state government disputed the fairness of the opposition's comparison.
"Labor is wrong again – we are detecting and collecting more unpaid tax than ever before," said Finance Minister Dominic Perrottet.
The state government said a number of factors had influenced the number of cases it prosecuted, including improved mediation procedures that made court cases less necessary.
The news comes as Victorian authorities said they would investigate the troubled 7-Eleven franchise over its payroll tax amid an ongoing scandal into the alleged underpayment of its workers.
There was also a lag between the detection of non-compliance of taxes and recouping money, the government said, making year-on-year comparisons fraught and meaning amounts collected in one year are likely to include outstanding amounts from the previous year.
The government said the majority of outstanding payroll tax was collected within a year and that education programs had raised the number of businesses volunteering non-disclosure by more than 300 over the past two years.
Office of State Revenue staff has grown from 180 in 2012 to nearly 220 staff in 2015.
But the office said internal analysis showed its employees were becoming more efficient and were recouping more money per capita than before and conducting thousands more payroll tax audits each year.
