Welcome to the first update on current compliance issues in which I touch on the directions we are taking in our compliance activities.
My objectives are to improve compliance by getting people to focus on the risk associated with particular behaviour or approaches and to continue to give the community confidence that the Tax Office is ‘on the job’ in administering Australia’s revenue systems.
We are encouraging better risk management by publishing our concerns and approaches to dealing with them. We have done this through our annual Compliance Program and companion publications such as Large business and tax compliance and DIY Super, It’s your money… but not yet!, by providing tax risk checklists for boards of companies, and with the ‘Red Flag’ warnings in Tax havens and tax administration. This gives people an idea of potential issues and consequences.
Our most intensive audit and review activities will continue to be at the large end of the market - large corporates and high wealth individuals. We are getting substantial audit results and identifying significant risks in this market.
You can expect us to be tougher on serious fraud and evasion. Bringing together our serious non-compliance operations has resulted in substantial prosecutions. We are also working with the Australian Crime Commission, the Australian Federal Police and the Commonwealth Director of Public Prosecutions.
We will focus on, and take tougher action against, habitual non-payers who are avoiding paying tax and thereby gain a competitive advantage over businesses who are doing the right thing.
Deliberate non lodgment (or non-registration) and deliberate non-payment of tax debts are amongst the most blatant forms of tax avoidance and so we will also focus on these.
We will put emphasis on finalising old scheme cases and clearing outstanding debts of those involved in them. In doing this we will take into account individual circumstances using the guidelines issued following the Inspector-General of Taxation’s report relating to employee benefit arrangements. As appropriate these will apply to other scheme cases. At the same time we expect those with outstanding debts to make suitable payment arrangements where they are not already in place.
Of course managing compliance is not only about audits, prosecutions and debt collection. It is also about making it as easy as possible for people to comply.
We will continue to expand the options for online, real time transactions. The initial release later this year of a new client relationship management system will give our client contact staff a total picture of a person’s tax affairs. So, when you ring us, you will talk to someone who understands your dealings with us.
The recently announced decisions by the Government on the review of income tax self assessment were about providing greater certainty to taxpayers while also providing us with the ability to do our job for the community. We are looking at ways of achieving this objective in our administration of individual taxpayers.
We will progressively move our bulk post assessment income data matching to online pre-population of electronic returns. This will not only give greater confidence about the accuracy of returns, it will also simplify return preparation. As a first step we plan to pilot pre-population of Centrelink benefits for 2005 e-tax returns.
We want to be able, in two to three years, to give many individual taxpayers almost immediate confirmation that their tax responsibilities have been finalised (from our perspective) with the lodgment of their return. This will be achieved progressively through improved risk profiling. Pre-population of income in returns will assist this.
Future updates will expand on these and other current compliance issues.
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Michael Carmody
Commissioner of Taxation
Last Modified: Wednesday, 1 April 2009
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