The Victorian Government has introduced a new 50% penalty tax for cases of recklessness under state tax laws, as part of the 2025–26 State Budget measures. This penalty applies where a taxpayer or their advisor is found to have acted recklessly, causing a tax shortfall or failing to meet notification requirements.

Previously, penalties ranged from 25% (negligence) to 75% (intentional disregard). There are concerns that this new penalty could be unfairly applied in complex cases, especially involving trusts or foreign interests, where rules are often misunderstood.