Tax office casts eye over council grants

The tax office is cracking down on recipients of local government grants and payments who do not report it for income tax and GST purposes.

The Australian Taxation Office (ATO) will this year enlist the help of councils in all states and territories to data-match information relating to more than 5000 people.

In 2013, the process raised $59 million in tax liabilities across 3169 cases.

It involves checking "non-compliant behaviour", such as non-reporting of income, under-reporting of income and non-lodgement.

The tax office has also identified a problem in people receiving payments across multiple local government and state borders - which led to the expansion of the program from four states to the entire country.

An ATO spokeswoman told AAP the agency would be seeking from councils such details as grant recipient names, payment amounts, GST paid and bank account details.

"This program will assist the ATO to address non-compliance with taxation obligations," the spokeswoman said.