The Australian Tax Office said it won't pursue the repayment of JobKeeper funds from businesses that made "honest mistakes" in claiming the wage subsidy.
“We have determined not to pursue $180 million, mostly from small businesses, where there have been honest mistakes," ATO Commissioner Chris Jordan told a Senate inquiry on Friday.
“We have undertaken a comprehensive review of cases that forecast a decline in turnover and found the vast majority of taxpayers undertook the projected decline in turnover test in good faith.”
The coalition is refusing to pressure eligible companies that received JobKeeper and then boosted revenues to hand the payments back.
Independent senator Rex Patrick told the Senate inquiry that the decision is in direct contradiction to the federal government’s approach to the thousands of welfare recipients it's claiming were overpaid due to JobKeeper.
Details from the ATO given to a Senate inquiry on Friday showed more than 97 per cent of entities receiving JobKeeper were small to medium businesses with turnovers of less than $250 million.
They received about $70 billion or 78 per cent of all JobKeeper payments.
About 0.2 per cent were large businesses, receiving $9 billion in payments.
And the remaining two per cent were charities and not-for-profits, who received almost $10 billion.
"What this data demonstrates is that JobKeeper overwhelmingly benefited small businesses, medium businesses, charities and not-for-profits," Finance Minister Simon Birmingham told Sky News on Friday.
"Yes, it also benefited big businesses, but across all of those sweeps, it benefited those businesses by keeping their staff on the books because none of those businesses got to keep a single dollar of JobKeeper money."
The ATO also revealed at the inquiry it had stopped more than $767 million going forward through its pre- and post-payment reviews.
And a review of 114,000 entities had so far identified $470 million in overpayments of which $194 million had been recovered.
Mr Jordan said the "projected decline in turnover test" was necessary to get the business support out the door as quickly as possible, but most businesses acted in good faith.
"From our review of more than 1600 entities across all markets, including 480 large businesses, we found more than 95 per cent were eligible."
Mr Jordan said JobKeeper scheme was designed to include an element of discretion to be "fair and reasonable with respect to small businesses making honest mistakes".
Labor, the Greens and independent senator Rex Patrick have been demanding more transparency around JobKeeper, including public disclosure of big companies' receipts.
Shadow treasurer Jim Chalmers said JobKeeper had been a "good idea badly implemented".
"We've seen the important role that public pressure has played already, with some companies deciding to pay back JobKeeper they didn't need," he said.
"We want to see more of that, transparency is part of that story."
The inquiry is being held to examine a Greens bill which would require the ATO to publish a list of all entities with an annual turnover of more than $50 million in receipt of Jobkeeper payments and how much each entity received.
Mr Jordan said one of his key responsibilities was to protect the integrity of the tax system and ensure the community has full confidence in the ATO's handling of their information.
"It is critical to the administration of Australia's taxation and superannuation systems that community confidence concerning the confidentiality of taxpayer information is not eroded."
Harvey Norman last week promised to repay $6 million of the estimated total $22 million in JobKeeper funds it received, after the company posted a 75.1 per cent rise in full-year net profit to $841.41m.
