Hardware giant Bunnings Warehouse has unwittingly become the centre of a massive tradie tax fraud, the chair of Treasury's Black Economy Taskforce says.

The fraud reveals the shaky "honour system" that underpins Australia's tax code.

Bunnings Warehouse's Australian Business Number is being used in more than 40 per cent of all ABNs quoted in the Northern Territory, according to Michael Andrew, the chair of Treasury's Black Economy Taskforce.

It is potentially costing taxpayers hundreds of millions of dollars in missed revenue.