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The vast majority of Australians pay their tax appropriately, knowing their fellow Australians do the same. It is this confidence that is the foundation of the high levels of voluntary compliance we see in Australia. In turn, high levels of voluntary compliance minimise costs for the community and the cost of administering the tax and superannuation systems.
In such an environment, we can differentiate our approach, minimising the intrusiveness of our compliance activities on those who want to comply, other than as a source of support, while being able to better identify those people and transactions that represent a higher risk. This is the basis of our Compliance model and risk management approach.
In dealing with members of the community, we tailor our response according to their history of compliance and approach to us, individual circumstances and risk profiles. This is supported by new technology including sophisticated intelligence and analytics capabilities.
For individuals this means on the one hand making it easier to comply, for example, by offering people the option of pre-filling their returns with information from third parties including their employers and financial institutions. On the other hand, third party information, including data from overseas revenue agencies, is also automatically matched against our records to identify cases where people are not reporting all their income.
For small businesses, we are a source of support, helping new businesses start off on the right track with, for example, sound record-keeping practices that minimise the tax risks of cash transactions or unexpected debts. When businesses get into difficulties, but demonstrate a willingness to do the right thing, we will get them over the line where we can, such as giving them reasonable lodgment and payment arrangements.
For large businesses, we offer ‘no surprises’ compliance arrangements with corporate entities which have a sound tax risk management framework and are open and transparent with us.
Maintaining community confidence requires a level playing field for all businesses, so that those who try to avoid their obligations do not have an unfair advantage over honest business people. Where businesses show a reckless disregard for their obligations the community expects us to respond firmly and professionally.
Through this annual compliance program and other initiatives, we help people understand and meet their tax and superannuation obligations at the lowest possible compliance cost to them.
Most Australians want to get it right the first time and appreciate that the tax and superannuation systems are there for their collective interests. Our compliance program is also about supporting them.
Michael D’Ascenzo
Commissioner of Taxation
Last Modified: Wednesday, 13 August 2008
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