Its submission to the Turnbull government's Black Economy Taskforce also suggests another tax amnesty - this time for employers and/or workers if they come forward and admit they've taken illegal cash payments in the past.

The firm has called for a national campaign - backed by business, trade union, social services and civil society leaders - to stamp out Australia's black economy. KPMG tax partner Grant Wardell-Johnson there had been an acceptance of the black economy based on a perception "everyone-is-doing- it".

The cash economy is thought to account for around $21 billion or 1.5 per cent of GDP, according to the Australia Bureau of Statistics. Black Economy Taskforce chairman Michael Andrew - who has described the illegal cash economy as "almost a national sport" - has said that around $15 billion of that is revenue that has been untaxed or overpaid welfare benefits.

Cash limit

KPMG supported moving to a $10,000 cash transaction limit. It also suggested a tax concession for businesses that adopt non-cash business models, which "could ultimately be extended to individuals".

The firm, which has long advocated the federal government raise the GST rate and lower the GST-free threshold, said the threshold change "should be deferred to the longer term" since it "may be seen as a 'tax grab' independent of the broader agenda".

The government would have to ensure that poor people who do not have access to credit or debit cards or smart phones are not disadvantaged. "Care needs to be taken to ensure that an underclass is not even more excluded from legitimate economic behaviour because they do not have access to credit or debit cards or smart phones," it said.

The move could be policed by ensuring vendors are denied rights if they are paid in cash. "A vendor of services paid for cash may be denied certain defences to civil action or have presumptions of law against the vendor in the absence of a declared transaction," it said.

Tax amnesty

Moves towards a cashless society are already afoot. On Wednesday big-four bank NAB will release a "Cashless Retail Sales Index", giving data on cashless retail spending by consumers, which the bank said reflected the "growth of online retailing and the increasing popularity of contactless payment systems".

The Reserve Bank estimates that cash payments by consumers have fallen from almost 40 per cent to just 18 per cent of the total value of consumer payments over the past nine years.

But getting to a point where secret cash payments stop altogether, will require greater enforcement KPMG said. It suggested a limited tax amnesty - similar to the amnesty for wealthy people with income and assets parked offshore that ended in 2014 - be granted for employers who report income and cash wages for the past two years. They would get lower penalties and a generous payment plan for back taxes.

For liabilities longer than two years, workers would be granted an amnesty for "dobbing in" their employer. The employer will be responsible for all PAYG, super and so on, going back four years, plus a penalty and a bond component.

Prosecute and brag

Mr Wardell-Johnson said "a strong visible enforcement presence would be needed once the amnesty period is over, with prosecutions well-publicised". "Tax advisers would be made aware that turning a blind eye is both unethical and subject to disciplinary action," he said.

The law could also be changed so there is "reverse onus of proof for some offences", the submission said. This would only be "adopted in limited circumstances where the amounts of money are significant and no explanation has been given, or that they are highly implausible".???

The firm made a series of other recommendations, including establishing a black economy hotline and a Black Economy Ombudsman so whistleblowers could report dodgy activity, and greater use of technology to combat fraud such as use of biometric markers on Medicare cards and other identification processes.

It also called for greater tax literacy training for tradies and small business, establishing a comprehensive new Australian Business and Investment Licence for all federal and state taxation and other regulatory services and an immediate ban on sales suppression technology.

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