Australian tax officials are examining how to end the "systemic abuse" of work expenses, with dodgy claims made by millions of Australians robbing the budget of at least $2.5 billion a year - more than the cost of multinational tax avoidance.

In a submission to a parliamentary committee examining tax issues, the Turnbull government said more than $22 billion was claimed in work-related expenses last financial year, and revealed the Australian Taxation Office will provide Treasury with advice that could lead to sweeping changes policy changes.

The ATO previously announced it would target tax deductions on cars, travel, clothing, and mobile phones. It has now set its sights on the "other" category, which includes internet and phone bills.

The total value of expense claims approved by the ATO has now ballooned to $8 billion each year.