Treasurer Jim Chalmers has defended the tax office as close to 300,000 Australians find themselves paying back debts they potentially didn't realise they owed.

The Australian Taxation Office has reactivated the debts of 290,000 Australians who had temporary amnesties during the summer bushfires of 2020 and later during the Covid lockdowns.

This will see many Australians get back a smaller tax return, or even owe the tax office money, after Labor scrapped the low and middle-income tax offset that offered $1,500 in relief.

Dr Chalmers has defended the tax office with many people set to miss out during a cost of living crisis.

'Obviously, the tax office does the best job it can in ensuring that people are complying with the tax system but trying to provide as much information as they can as these steps are taken,' he said on Monday.

The Australian Taxation Office has reactivated the debts of 290,000 Australians who had amnesties during the summer bushfires of 2020 and later during the Covid lockdowns (pictured is a Centrelinkj queue on the Gold Coast)

'I'm obviously not going to criticise the important work that the ATO does.'

Dr Chalmers said he had also received a briefing from Australian Taxation Office Commissioner Chris Jordan.

'I know, speaking to the Commissioner and others in the ATO, that when they conduct this necessary work, they try and do it in the most sensitive way that they can,' he said.

'I expect that to continue.'

The tax debts that had been put on hold in 2020 were reactivated from July 2022, which means they would be reflected in tax returns for 2022-23.

An Australian Taxation Office spokeswoman confirmed the end of debt postponements would affect 290,000 people this financial year.

Tax returns are due by October 31 if individual is submitting it or May 15 for those going through an accountant.

Labor in government scrapped the Coalition's low and middle-income tax offset that provided that provided up to $1,500 in tax relief for those earning up to $126,000.

Until June 2022, those earning $48,000 to $90,000 were entitled to a $1,080 tax offset and a one-off $420 cost of living allowance.

That means those submitting tax returns for 2022-23 won't be getting this relief, and will have to wait until the stage three tax cuts kick in on July 1, 2024.

Dr Chalmers, however, has ruled out increasing the GST from its present level of 10 per cent following a call from the Business Council of Australia.

Treasurer Jim Chalmers has defended the tax office as close to 300,000 Australians find themselves paying back debts they potentially didn't realise they owed

'That's one of the things we don't have agreement with the BCA on - we don't have any plans or any intention to change the rate of the GST and I think I've made that clear on other occassions,' he said.

This is despite confirming he agreed with most of their suggestions published in a new report on Monday.

'There is so much more we agree with the BCA than disagree on,' he said.

The Business Council of Australia, which represents millionaire chief executives, has been campaigning for the Voice to Parliament alongside Prime Minister Anthony Albanese.