2.1
This chapter explores the Australian Taxation Office’s (ATO) achievements, and the steps it undertook to improve its administration of the tax system and taxpayers’ experience over the 2018-19 reporting period, including through more robust compliance measures, and improvements in digitisation.
2.2
Evidence put before the Committee raised concerns about the ATO’s resource allocation, complaint handling and processing timeliness and how it captures and reports this data. Witnesses told the Committee that some of this data was not captured in the 2018-19 annual report, which prevents the building of a clear and accurate picture of these issues and called for more granular data collection and reporting.
Digitising and streamlining processes
2.3
The ATO administers revenue collection on behalf of the Australian Government, and the Goods and Services Tax on behalf of the states and territories. The ATO is also responsible for managing the superannuation system and is the custodian of the Australian Business Register. It also has purview of the charities sector, which includes some organisations that are self-evidently not meant to be captured by the Australian Charities and Not for Profit Commission.
2.4
Throughout the 2018-19 financial year, the ATO collected taxation to the value of approximately $533 billion gross, or $426 billion net, post refunds. This marked an increase of 7.4 per cent compared to the previous financial year.
2.5
In addition to the tax collection, the Commissioner of Taxation (the Commissioner) highlighted a series of milestones that were delivered by the ATO over the 2018-19 reporting period. These included further steps towards the creation of a streamlined, integrated and data-driven future, as announced in the ATO Corporate Plan 2018-19. This included achievements in the realm of digital service delivery and compliance activities.
2.6
In particular, the Commissioner cited the implementation of ‘major technology initiatives to streamline processes and facilitate engagement. This included the Online Services for Agents (OSfA), the extension of Single Touch Payroll (STP) for more businesses, and the modern and secure authenticated credential for business in myGovID.
Online tax professional platforms
2.7
In January 2019, the ATO released the OSfA, a secure system wherein tax professionals can access services and information and conduct transactions. The initiative is part of the ATO program of activities to streamline engagement with tax professionals and enable ‘smoother, more functional service for tax professionals.’ The system won the 2019 AMY award, ‘a utility campaign which focuses on the best in tools, apps and online services.’
2.8
In addition, the Practitioner Lodgement Service (PLS) allows tax practitioners to electronically lodge tax returns. Although not a standalone product offered by the ATO, the PLS offers but ‘a series of related Application Program Interfaces software vendors and digital providers’, which enables tax practitioners to ‘choose the practice management software solution that best meets their needs while ensuring they can continue to interact with the ATO electronically.’
2.9
The ATO submitted to the Committee that the interactive service model delivered a number of productivity benefits, including quicker tax refund processing, improved data validation resulting in reduced surname and date of birth mismatches by over 99 per cent since July 2018, and higher quality support for tax professionals.
2.10
These online systems support approximatively 25,000 registered and active tax agents and approximately 10,000 active, registered Business Activity Statement agents. The ATO acknowledged the ‘critical role’ tax practitioners have in ‘facilitating willing participation’ and influencing taxpayer compliance. Approximately 95 per cent of small businesses, 86 per cent of self-managed superannuation funds and 63 per cent of taxpayers choose to manage their tax and superannuation affairs through a tax practitioner.
Single Touch Payroll
2.11
Over the 2018-2019 period, the ATO deployed STP - a real-time reporting mechanism for PAYG withholding and superannuation - that ‘streamlines reporting for employers and provides faster access to prefilled data in tax time.’
2.12
At 30 June 2019, 160,000 employers (both substantial and those with less than 20 employees) reported tax and superannuation information through STP. And in turn, STP collected information to fill tax returns for around 8.1 million individuals. The ATO told the Committee:
For the first time, the ATO can help protect an individual’s superannuation by reconciling what an employer reports to the ATO against how much has been paid to each super fund. Individuals can now look up on myGov how much their employer is contributing each pay day and call the ATO if they are concerned about missing amounts, knowing the ATO had the same information and can act decisively if it needs to.
Activity Statement Financial Processing project
2.13
The ATO reported that another of its digitisation activities over the period was the Activity Statement Financial Processing project, which the Commissioner described as ‘one of the biggest data migrations in the public sector,’ where multiple client accounting systems were merged into one.
2.14
The Activity Statement Financial Processing project involves combining taxpayers’ income tax and activity statement accounts to allow them to more easily understand their outstanding tax obligations.
Greater tax compliance and the Tax Avoidance Taskforce
2.15
The Committee heard that the ATO has built a robust tax compliance program and that such a program is ‘crucial to supporting community confidence in our tax system.’ The Committee also heard that there are strong held perceptions in the Australian community about taxation fairness, in particular about addressing the tax compliance of large corporate organisations.
2.16
A key compliance achievement occurred in November 2018 with the ATO’s high profile settlement with BHP Group Ltd, resolving a long-standing dispute in relation to BHP’s Singapore marketing hub. Marketing hubs typically provide marketing and sales functions for goods or commodities that are produced in Australia and sold offshore.
2.17
BHP paid the ATO $529 million cash, and ‘restructured its marketing hub so that all profits from the hub’s sale of Australia commodities will be taxable in Australia.’ The ATO said that this was a ‘landmark’ and that this would ‘send a strong signal to other industry participants.’
2.18
The settlement was the outcome of compliance activities undertaken by the
Tax Avoidance Taskforce (the Taskforce). The Taskforce was established to ensure large corporations and wealthy individuals pay the right amount of tax. The Taskforce focuses on the top 1000 public and multinational businesses and the top 500 privately owned groups, which together are responsible for generating more than two thirds of all corporate tax.
2.19
On 1 July 2016, the Taskforce received $678 million over four years, and an additional $1 billion in the 2019-20 federal budget to extend its operation to 2022-23. The ATO reported that $13.9 billion in tax liability had been raised and $8.2 billion collected between the Taskforce’s inception in July 2016 to June 2019 and that 213 reviews had been completed.
2.20
However, the Committee understands from the evidence that it is not only the Taskforce that the ATO uses to increase and encourage compliance. It is also supported by a range of legislation and rules, including:
the Multinational Anti Avoidance Law (MAAL), which focusses on ensuring that multinationals pay the right amount of tax on profits earned in Australia;
the Diverted Profits Tax (DPT), which ensures that taxes paid by significant global entities (SGEs) accurately reflect their economic activities; and
the anti-hybrid mismatch rules, which are designed to prevent multinational companies from gaining an unfair competitive advantage by avoiding income tax or obtaining double tax benefits.
2.21
However, evidence received by the Committee indicates there remains an element of tax administration mistrust amongst the Australian community, despite the ATO’s actions to hold large corporations and wealthy individuals to account. The Committee heard an articulation of the issues, and some suggestions for the way forward.
2.22
Mr Ashley King of TaxResolve told the Committee that the ATO was ‘one of the best administrations in terms of compliance levels in Australia’ but suggested publishing ‘the number of evasion findings or cases’ on a scorecard-like system to increase visibility and build public confidence about the ATO’s compliance activities.
2.23
The Inspector-General of Taxation and Taxation Ombudsman (IGTO), established under the Inspector-General of Taxation Act 2003 (Cth), undertakes reviews and investigations to identify systemic issues in the administration of tax law. In its submission to the committee it pointed to the ‘lack of transparency in understanding the ATO’s tax position as administered, [and is likely to have] follow-on impacts regarding taxpayers’ perceptions of trust and confidence in the ATO.’
2.24
The IGTO suggested that ‘since large corporate groups are considered, by many, to be a benchmark for tax compliance and influence the willingness of other markets to voluntarily comply, increasing the transparency in the reporting of such performance measures would only improve taxpayer compliance and overall confidence in the administration of the tax system.’
2.25
Self Employed Australia directed the Committee’s attention toward compliance measures taken in the United States of America (US) and recommended these as a model of reform:
The US reforms detailed here offer a model, even a template, for tax administration reform in Australia…Of course, the US and Australia have different institutions and circumstances, so it’s not a matter of simply ‘plonking’ what has been done in the US on to Australia. Rather, it’s a matter of identifying the principles and practices of the IRS reforms to see what, if and how those principles and practices could be applied to the Australian setting.
2.26
In 2006, a taxation law was passed in the US to provide greater protection to whistle-blowers, and to assist the Internal Revenue Service (IRS) with its compliance activities. The legislation provides ‘financial incentives to whistle-blowers who expose fraud of up to 30 per cent of the revenue raised as a result of their whistleblowing.’ This resulted in the IRS raising $US13.7 billion in extra tax revenue in 2017.
2.27
Self Employed Australia suggested adopting and adapting the system to the Australian taxation system, to assist the ATO with its compliance activities.
Making tax easier - mechanisms to assist taxpayers
Dispute resolution initiatives
2.28
The Committee is aware that the ATO has implemented a series of initiatives to assist taxpayers with dispute prevention and resolution, including through the introduction of the Small Business Program Pilot, the Dispute Assist Service and the Small Business Concierge Service.
Small Business Program Pilot
2.29
On 1 July 2018, the ATO launched the 12-month Small Business Pilot Program to reduce the likelihood and cost of disputes. The program, which provides an additional independent review service to eligible small businesses disputing income tax audits, was extended until 31 March 2021. The Office of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) welcomed the extension of the independent review.
2.30
As at June 2020, the ATO had completed 153 reviews, 14 of which resulted in the taxpayer’s view being supported in full, and 34 supported in part.
Dispute Assist Service
2.31
The ATO, through the Dispute Assist Service, offers small business taxpayers an independent review prior to finalising their income tax audits and provides in-house facilitation and dispute assistance services.
2.32
Between 1 July 2018 and 30 June 2020, the Dispute Assist Service received 584 requests - 60 per cent from individual taxpayers and 37 per cent from small businesses. Among these, 344 were found not eligible for the service or no longer required the service, and 248 dispute assist cases were finalised.
Small Business Concierge Service
2.33
On 1 March 2019, the ASBFEO, in collaboration with the ATO, established a Small Business Concierge Service ‘to assist small businesses whose tax dispute has been rejected by the ATO‘ on options to appeal the decision to the Administrative Appeals Tribunal.
Other taxpayer support initiatives
2.34
The ASBFEO told the Committee it welcomed a series of ATO initiatives to support the small business taxpayer community, declaring:
the ATO has implemented a wide range of concessions and practical support measures to assist small businesses, such as automatic deferrals of lodgements, extended payment dates, remission of general interest charges and an overarching ability to negotiate further concessions on a case-by-case basis.
Pay As You Go Instalment
2.35
The ATO’s flexible payment arrangement is another of its support initiatives designed to assist taxpayers with their tax liabilities. This arrangement allows small businesses to defer payment of the principal of their Pay As You Go Instalment (PAYGI) income tax for up to 22 months without incurring any late payment penalties.
2.36
These arrangements are in accordance with the ATO practice statement PSLA 2011/14. The Commissioner has the power to provide further flexibility for taxpayers experiencing financial hardship and difficulty meeting their current and ongoing tax liabilities. For example, low interest terms can be applied.
2.37
The ATO also reported that in the 2018-19 period, the PAYGI assisted taxpayers to pay their liabilities on time and recorded a 0.4 percentage point increase in the proportion of liabilities paid on time compared to the previous year.
Communication and education with small businesses
2.38
The ATO further explained to the committee how its engagement with tax professionals, industry representatives and government agencies facilitates dialogue and reduces complexity in tax administration, to enable better compliance. In particular, the ATO acknowledged the important contribution to the economy of small and medium enterprises (SMEs), and described how it ‘engages with, educates, assists and guides taxpayers through contemporary products and tailored services to continually improve the small business experience.’
2.39
The ATO provided details of its approach to communication and education with SMEs, advising that it was underpinned by the ‘Small Business Newsroom and the New-to-business-essentials email services’, 50 education products delivered via workshops and webinars, coaching kits, and set payment reminders via the ATO application.
2.40
However, the University of New South Wales (UNSW) Tax Clinic has found that between 30 to 40 per cent of Australian taxpayers across all socio-economic groups have unmet needs for independent tax advice. The UNSW Tax Clinic told the Committee that small businesses and sole traders and microbusinesses, in particular, are faced with both financial literacy issues and tax literacy issues.
2.41
The UNSW Tax Clinic anticipates the figure to continue to grow as a result of recent economic shocks, including the COVID-19 pandemic and a series of natural disasters, from bushfires, to floods and droughts.
Data collection and reporting
Is there adequate resourcing?
2.42
The IGTO noted in its submission to the Committee that while the ATO has had its functions extended over time, its workforce has experienced the opposite fate. The agency’s 2018-19 annual report noted a reduction in the number of employees, both ongoing and non-ongoing, of approximately six per cent over the reporting period.
2.43
On 1 July 2018, the ATO took over the management of compassionate release of superannuation, previously administered by the then Department of Human Services. It is unclear what volume of additional work this has placed on the ATO as the 2018-19 annual report does not provide the number of applications received for the compassionate release of superannuation.
2.44
Further, the IGTO noted the lack of detailed data included in the 2018-19 annual report to accurately assess the ‘sufficiency of resources for the ATO to deliver services to the community’ and the adequacy of ‘ATO resourcing allocation’ to undertake its new functions.
2.45
The IGTO suggested that the level and allocation of the ATO’s resourcing may be impacting on its performance and ‘community dissatisfaction and complaints.’ However, the IGTO’s true assessment of this was limited due to the absence of data on resourcing allocation.
2.46
The Tax and Transfer Policy Institute noted to the Committee that the 2018-19 annual report did not explain how the ATO Tax Avoidance Taskforce resourcing was linked to the revenue outcome of the Taskforce.
2.47
The Tax and Transfer Policy Institute commented that the ATO’s reporting was confusing and called for more transparency and clarity in the reporting of resourcing for specific activities and numbers, and the associated revenue and other outcomes of that resourcing.
2.48
Similarly, in oral evidence to the committee, Ms Karen Payne, the IGTO, noted that the 2018-19 annual report did ‘not include details on how the ATO resources are committed to managing complaints.’ Ms Payne added:
we've identified a number of areas where ATO resourcing allocation may be impeding an efficient delivery of ATO services, leading to community dissatisfaction, complaints and concerns being raised, including with the IGTO in some cases…The Australian Taxation Office is one of the largest employers within the Australian Public Service and one of the largest service delivery agencies of the Commonwealth of Australia. Better insight on areas where ATO resources are deployed for improved transparency, accountability and oversight would benefit parliament, its committees and the broader tax and business community.
2.49
The IGTO recommended for the Committee’s consideration that the ATO provide more granularity in its reporting of resourcing, both by business areas and job family, to increase transparency.
The ATO’s approach to ‘complaints’
2.50
The ATO reported that in the 2018-19 period it recorded its lowest level of complaints received—less than 20,000—since 2009. Further, the ATO reported that 88 per cent of the complaints were resolved within 15 business days (or within the date negotiated), which exceeded their target of 85 per cent.
2.51
However, the IGTO noted in its submission to the committee that the ATO itself acknowledges that the categories of complaint issues have changed in the reporting period, so could not be compared to the 2017-18 annual report complaint figures.
2.52
The IGTO advised the Committee that the 2018-19 annual report did not capture data on the number of feedback and compliments received, making it difficult to adequately assess the level of clients’ satisfaction.
2.53
The IGTO noted that the ATO does not always record complaints that are successfully resolved during the first telephone call as ‘complaints’. Further, the IGTO expressed concern that where a complainant reported having lodged a complaint with the ATO, the ATO treated the complaint as ‘feedback’.
2.54
The IGTO further remarked that the ATO has not adopted the Australian Standard’s (the Standard) definition of a ‘complaint’, which has been developed as best practice guidance to ensure consistency in complaint management across organisations in Australia and New Zealand. Instead, the IGTO believes that the approach that the ATO takes to the definition of a ‘complaint’ is more akin to a ‘dispute’ as defined in the Standard.
2.55
The IGTO believes the danger with this approach is that ‘there may be risks that complaints as defined in the Standard are under-reported and comparisons of complaints handling service across agencies are made more difficult.’
2.56
The IGTO told the Committee that while the Standard is not legally binding, it ‘considers that adopting the Standard promotes consistency and credibility in the ATO’s management of complaints.
2.57
The IGTO also noted that the ATO was yet to report on complaint cases against the principles of the Taxpayers’ Charter, which the ATO had previously agreed to, further to an IGTO review.
2.58
The IGTO raised the issue of public awareness of the complaint mechanisms available, which had been brought to light through a survey of mainly professional tax advisers conducted in July 2020 via an online webinar. While the sample size was not given to the Committee, the IGTO noted that 67 per cent of the group reported not being aware of the channel for lodging formal complaints with the ATO, and 72 per cent were not aware of the Taxation Ombudsman Complaints Service.
Capturing complaint resolution timeliness
2.59
In addition, the IGTO commented that the ATO did not differentiate between the complaints that were resolved within 15 business days from the time they were first raised and those whose timeframe had been adjusted in agreement with the complainants.
2.60
The IGTO pointed to an Australian National Audit Office (ANAO) report that recommended that the ATO capture the complaint resolution timeliness with adjusted and non-adjusted timeframes separately to increase transparency.
2.61
The IGTO added that the ATO had not yet reported the two sets of data separately in their annual reports, despite agreement to the ANAO’s 2014 recommendation.
Tax performance – community confidence in tax collection
2.62
The Committee was told that at the heart of ‘tax performance’ is the community’s confidence in the tax administrator to reduce the tax gap and provide tax and superannuation assurance. The Committee heard that the ATO annual report also lacked reporting data on this key performance indicator.
2.63
Tax performance is measured by a series of markers, including ‘tax gaps’ and ‘tax assured’ indicators, and the ‘correlation between resourcing and funding.’
2.64
A ‘tax gap’ is the difference between the amount of tax expected to be collected and the actual amount collected. As the IGTO put it – ‘in essence, tax gaps measure the level of tax non-performance.’
2.65
‘Tax assured’, also referred to as ‘justified trust’, refers to an indicator that measures the level of confidence in the tax system that the amount of tax collected is correct. This marker assesses the overall health of the taxation system.
The ATO reported its tax assured for the first time in the FY19 Annual Report, with an estimated total tax of 45.6% being assured for FY17, which is a decrease from the revised FY16 estimate of 47.4%.
2.66
The IGTO noted in its evidence that ‘most tax gap estimates are not available for the FY18 and FY19 years due to data lags.’ The IGTO acknowledged the ‘relative infancy of these performance measures and the potential sensitivity concerns in publishing such information,’ but asserted the need for the ATO to provide ‘an insight into how it manages its tax performance activities.’
2.67
The ATO advised the Committee that that latest published net tax gap was 6.4 per cent, equating to a tax performance ratio of 93.6 per cent. Mr Jeremy Hirschhorn, Second Commissioner of Taxation at the ATO, indicated that the tax gap represented about $30 billion.
2.68
The ATO told the Committee:
we know that more than 90 per cent of income tax paid by high wealth private groups is paid voluntarily or with little intervention from the ATO, and we see that the vast majority of high wealth private groups pay the right amount of tax.
2.69
In its evidence Self-Employed Australia drew the Committee’s attention to the cost of collecting tax in the US with Australia, and found that while the ratio in the US was lower, resulting in a leaner tax administration, the ATO was, in 2016, at least three times less efficient.
Improving general timeliness
2.70
The IGTO drew the Committee’s attention to ‘a number of areas where the ATO resourcing allocation may be impeding efficient delivery of ATO services leading to community dissatisfaction and complaints or concerns being raised, including with the IGTO in certain cases.’ The key areas raised were:
longer timeframes for complaint resolution and for issuing binding advice; and
a backlog of several thousand objections.
2.71
As referred to earlier, the ATO reported 88 per cent of complaints being resolved within
15 business days, exceeding the ATO’s performance benchmark at 85 per cent. However, the IGTO noted that the number of complaints resolved within the timeframe had decreased from 93 per cent in 2016-17, to 88 per cent in 2018-19, and questioned whether this was correlated to the increased functions of the ATO and the decrease in resourcing.
2.72
The 2018-19 annual report indicated an increase in the number of objections compared to previous reporting periods. Objections are where a taxpayer objects to a decision made by the ATO. Sometimes objections are made by the taxpayer about their own self-assessed returns to amend their declaration of income and expenses.
2.73
The IGTO received complaints about the timeliness of objections being actioned, seemingly linked to the ATO’s backlog of several thousand objection cases, and possibly a result of the decrease in resourcing and resource allocation.
The taxpayer’s right of review is one of the key pillars of the rule of law and tax system. The objections framework continues to be a vital part of tax administration as it enables a taxpayer to seek an internal review of an ATO decision.
2.75
The IGTO also commented on the decline in timeliness of the provision of binding advice, which impacts on taxpayers’ certainty and increases risks of adverse findings by the ATO. The IGTO observed that a 10 per cent decrease in resourcing in the Tax Counsel Network where the ATO’s Public Advice and Guidance Centre is, in the 2019 financial year, may have resulted in extended timeframes to finalise public rulings.
Committee comment
2.76
The Committee was pleased to hear about the ATO’s initiatives to increase digitisation to facilitate and streamline engagement with taxpayers and tax professionals, in particular. The Committee notes the mixed reaction from tax agents about these improvements and enhancements, and encourages the ATO to continue efforts to identify stakeholders’ needs and adjust processes accordingly.
2.77
The Committee welcomes the ATO’s report on compliance activities, especially in relation to the Tax Avoidance Taskforce and congratulates the ATO for the resolution of high-profile disputes. The Committee feels that more communication is needed from the ATO to the community to build public confidence that large corporations and wealthy individuals are being held to account. The Committee also encourages compliance from these groups.
2.78
The Committee acknowledges the positive impact of the mechanisms to engage and assist taxpayers with their tax disputes and liabilities. However, the Committee feels, in the view of the evidence collected, that more education is needed to ensure that taxpayers understand the complaint and complaint resolution processes.
2.79
The Committee finds that limited data collection and reporting in the areas of resourcing, complaints, including for complaint resolution, and tax performance meant that the 2018-19 annual report drew an incomplete picture of the situation. The Committee heard and supports calls for the ATO to increase transparency and better report on the allocation of funding and resources, including by segmenting resourcing data and matching it to activities and outcomes.
2.80
The Committee is further concerned by the IGTO’s observations that potentially inadequate allocation of resources might be impacting on the ATO’s service delivery and resulting in increasing taxpayer dissatisfaction. The Committee is of the view that it is important to have current, accurate and adequate data to make informed decisions and ensure the accountability and integrity of the tax administration.
2.81
The Committee notes that the ATO’s definition of a ‘complaint’ is not aligned with the definition in the Australian and New Zealand Standard AS/NZS 10002:2014 Guidelines for complaint management in organisations to adequately and consistently capture complaints. The Committee agrees that this may impact on transparency and accurate reporting and cause dissatisfaction among taxpayers when what they see as complaint is treated as feedback. In addition, the Committee notes that this causes discrepancies when comparing data with other government agencies.
2.82
The Australian Business Register (ABR) stores business and organisation details to allow the community and government to verify business information.
2.83
The ABR was established under the A New Tax System (Australian Business Number) Act 1999 (Cth), which stipulates that the Registrar of the ABR is responsible for its administration including registration and maintenance of Australian Business Numbers (ABNs) and a range of activities to maintain the ABR integrity. From 2015-16 onwards, the ABR annual report was merged into the ATO’s annual report. The Registrar of the ABR is also the Registrar of the Australian Business Registry Services and the Commissioner of Taxation, Chris Jordan AO.
2.84
When businesses and other organisations, including government bodies and non-profit organisations register for an ABN, their identity information is stored in the ABR. An agency can then use the data for a range of purposes including:
service delivery – promoting new government services or grants, informing legislative changes, licensing of business activities and identifying and supporting new businesses
procurement – validating supplier’s ABNs, identifying local suppliers and trades people for council initiatives and conflicts of interest checks
planning and economic development – identifying changes in business growth and establishing future strategic plans to meet the needs of community growth and change
compliance – validation of business details, risk profiling, work planning and site visits
disaster management – identifying businesses, in a disaster area, that have been affected and those that can provide support.
2.85
Given the important role the Register plays, the administration of the ABR has been subject to previous scrutiny, including, to a limited extent, by this Committee in 2019 (who noted that there was limited comment from participants in that inquiry on the administration of the ABR per se) and three audits by the Australian National Audit Office, the latest being a report into the Administration of the Australian Business Register in 2014, a Gateway Review10 commissioned by the (then) Department of Finance and Deregulation on the development and implementation of the national business names registration scheme; and a review by Industry of the Australian Business Account. All reviews found significant shortcomings.
2.86
The Committee notes the ABR is now controlled and managed by the ATO. These registries are significant assets. Arguably, the registries are expensive, badly organised, housed on legacy technology that is in desperate need of replacement, present material cyber security issues, are hard to access, hard to analyse and enable levels of fraud in Australian society that just should not be possible in the 21st century.
2.87
The Committee notes with significant interest that the Australian Government has recently funded and announced the full implementation of the Modernising Business Registers (MBR) program. This program will establish the new Australian Business Registry Services (ABRS) and streamline how a business registers, views and maintains its business information with government. The ATO recently told the Committee that this reform program, including the introduction of new legislation to modernise the collection of data, will assist businesses and companies in Australia to better interact with government by giving their data once only, and that it will also provide the government with a framework to collect better quality data.
2.88
The Committee is concerned that it has been a number of years since the ATO first introduced the idea of the activity or tax gap. It was initially unable to specify what it believed that number to be in the Australian economy. Some estimates put it as high as $50 billion a year. The Committee is of the view that the ATO should publish a report into the economic activity gap and its analysis on an annual basis.
2.89
The Committee has been made aware that a big problem faced by researchers is that government data sets are not consistent in their definition or format. Making collection, synthesis and analysis unnecessarily difficult.
2.90
The Committee recommends that the Australian Taxation Office increases its levels of transparency and communication about its compliance activities to better foster community trust and confidence in tax administration in Australia.
2.91
The Committee recommends that the Australian Taxation Office raises awareness and educates taxpayers and tax professionals about its products, regulations, and the complaint process to minimise unmet needs for independent tax advice and better protect taxpayers.
2.92
The Committee recommends that the Australian Taxation Office records in its annual reports a breakdown of resourcing both by business areas and job family to increase transparency in the allocation of resources and accountability for resources and funding allocated to special programs and taskforces, and that resources are matched with activities and outcomes.
2.93
The Committee recommends that the Australian Taxation Office adopt the definition of ‘complaints’ as per the Australian and New Zealand Standard AS/NZS 10002:2014 Guidelines for complaint management in organisations, to adequately and consistently capture complaints data.
2.94
The Committee supports the Inspector-General of Taxation and Taxation Ombudsman’s Recommendation 1(d) from the Review into Taxpayers’ Charter in 2016 and recommends that the Australian Taxation Office categorises complaint cases in line with the principles of the Taxpayers’ Charter.
2.95
The Committee recommends that the Australian Taxation Office provides more detailed reporting for each financial year to reflect:
the number of complaints, feedback and compliments received; and
a differentiated reporting of complaints resolved within the 15 business days target timeframe, and those resolved within the adjusted timeframe negotiating with the taxpayer.
2.96
The Committee commends the Australian Tax Office for work already commenced on modernising the Australian Business Register. The Committee urges the Federal Government to consider the use of blockchain and other leading technologies to optimise the use of the registry, and minimise ongoing costs of maintaining the Registry. Such technical deployments should also future proof the work currently being undertaken by the Australian Taxation Office.
2.97
The Committee recommends that the Australian Tax Office publish a report into the economic activity gap and its analysis on an annual basis.
2.98
The Committee recommends that the Australian Government establish a cross departmental team with the intention of drawing up Australian standards for data collection, definition and formatting to further enable the open data objectives of the Australian Government.
2.99
The Committee recommends that the Australian Charities and Not for Profit Commission review its regulatory burden on all organisations but especially those reporting to more than one regulatory body.