Commissioner's address to release Compliance program 2006-07
Sydney, Thursday 17 August 2006
(check against delivery)
The Tax Office has been making public our annual Compliance Program since 2002 and I am proud to continue our commitment to openness and accountability by releasing this year’s program to the community1.
No tax administration is resourced to chase every last dollar of tax, so the art of tax administration is to create an environment where people voluntarily comply with their obligations.
Fortunately, we have a culture where the majority of taxpayers voluntarily comply with their obligations. Indeed, if you add up all the proceeds of our active compliance activities, it represents less than 2% of the total net tax receipts of $214 billion we collected in 2004/05 – the rest came in as voluntary compliance supported by systems such as Pay As You Go.
Australia is often praised by international observers as a good place to invest and to live. The Tax Office can play its part in contributing to the country’s prosperity by administering the tax laws fairly and efficiently in a way that instils community confidence, encourages high levels of voluntary compliance, and supports rather than impedes business activity. Our role is to encourage and help people comply with the tax laws – to get them over the line so to speak. We also recognise that we can all make honest mistakes – and we are committed to treating people reasonably and fairly where this occurs. So a key approach for us is to differentiate between taxpayers who are trying to comply, and those who are not. And this starts from the assumption that people are trying to comply unless there are facts that suggest the opposite, and even in these cases we try to be firm but fair. This perspective underlies the taxpayer’s charter and our compliance model.
In administering Australia’s tax laws we have to make informed choices as to how and where we focus our attention and direct our scarce resources to promote high levels of voluntary compliance. These are not easy decisions. That is why we make our compliance program public and seek input from the community on our priorities and the risks which are seen to impact on the intended operation of the tax system.
The publication of the compliance program also reflects a shift away from a ‘gotcha mentality’ to one that sees ‘prevention as better than cure’.
Our planning processes benefit from our increasingly sophisticated risk management approaches and from the insights of others in the community including tax professional, business and community representative bodies. Our aim is to better understand the causes for non-compliance and to develop tailored and proportionate responses that address the underlying concerns – ranging from helping people understand their rights and obligations under the law and making it easier for them to comply, through to deterring, detecting and dealing appropriately with those that do not comply. This is all about fairness for taxpayers and a level playing field for business.
Final results of our 2005-06 compliance activities will be published in our Annual Report 2005-06 due in October. However, the 2006-07 Compliance Program publication contains preliminary data indicating that we collected around $4 billion from our active compliance activities for 2005-06.
Last year saw significant progress in resolving the mass marketed investment scheme cases. Over 95% of mass marketed investment scheme investors have finalised their income tax dispute with the Tax Office with more than 80% having paid the associated tax. We are now focusing on implementing the new promoter penalty regime, working with our stakeholders in co-designing the administrative guidelines for the application of the promoter penalty laws.
Last year we also successfully implemented several major policy initiatives including Choice of Superannuation Fund, the 30% Childcare Rebate, the Entrepreneurs' Tax Offset, the Australian Equivalent International Financial Reporting Standards and Business Blackhole Expenditures.
Overall, our audit capability has been strengthened by new technology introduced through our ‘Change Program’. For the first time, our new systems provide a history of a taxpayer’s dealings with us and automatically generate cases and detailed action plans. These new support tools are being rolled out to 5,000 compliance staff.
We have also expanded our data matching programs and we’ll match at least 48 million records this year, comparing tax returns with a range of external sources to ensure correct income is declared.
The additional funding provided in this year’s Federal Budget puts us in a stronger position to address a number of compliance risks through the following strategies:
- checking the compliance of the increasing number of very wealthy individuals
- dealing with promoters of aggressive tax planning schemes by using the new promoter penalty laws
- collecting outstanding debt
- combating serious evasion and fraud, particularly via tax havens, in cooperation with other government agencies, for example through Project Wickenby
- supporting the implementation of the new national legislative framework for tax practitioners’ registration and regulation
- pursuing investors who fail to declare capital gains tax,
- verifying the compliance of large businesses and developing a co-operative approach with those that want to do so, and
- implementing new legislation, in particular the Budget announcement on superannuation.
We try to provide individual taxpayers with the information and support they need to comply with the tax laws, such as the popular e-tax online tax return and the pre-population of some return form items, calculators and our telephone lodgment and help services.
However, we still find that many individual taxpayers make incorrect claims for work-related expenses. Many fail to keep adequate records, especially for work-related and rental expenses. Others over-claim refunds by not declaring rental income or capital gains, while others do not meet lodgment obligations.
Work-related expense deductions
In 2004-05 around 7 million individuals collectively claimed $11.5 billion in deductions for work-related expenses. The number of claims increased by nearly 3% last year, while the value increased by 7.1%.
We are seeing claims for deductions which seem high compared to the salary and wage income declared, and claims outside the regular pattern for an occupation or industry. This year we have already written to over 210,000 employees (before 2005-06 returns are due) to request they take particular care with their claims and have asked 15,000 employees to support their claims, such as by producing logbooks for motor vehicle expenses.
We will conduct around 15,000 reviews or audits of work-related expense claims and visit 300 tax agents with abnormal claim patterns to review a sample of their clients’ returns.
Occupations that will be reviewed include accountants, hospitality industry service workers, factory hands, store workers and process workers, mechanical, automotive and electrical tradespeople, information technology professionals, and mining site employees.
Rental income and expenses
In 2005-06 we conducted 6,900 reviews or audits of rental income and expense claims, resulting in revenue adjustments of $6.9 million. As over 65% of investors reported losses on rental investments, we will continue our compliance activity in this area.
This year we have already written to 76,000 new entrants to the rental market to help them understand how to declare rental income and correctly claim deductions. A further 45,000 individuals who are at risk of not complying will also receive a letter reminding them to take extra care with their claims.
Our concerns range from claims for deductions for property that is not genuinely available for rent or claiming full deductions where a property is available for rent for only part of the year, through to incorrectly apportioning deductions related to private borrowings or travel.
Investors should note that we use land tax data from state revenue offices to identify those who own investment properties, holiday houses and units, and check they have declared rental income in their returns.
Capital gains tax
In 2005-06, we reviewed or audited 9,500 returns that failed to fully disclose capital gains tax events, resulting in revenue adjustments of about $40 million.
This year we will compare tax returns with information from state revenue offices and other government agencies, the Australian Stock Exchange and share registries, as well as information reported by managed funds.
We will write to 23,000 individuals who purchased investment property, shares or units in a managed fund in 2005–06 to inform them of their capital gains tax obligations if they dispose of these assets. We have already written to 5,000 individuals who appear to have made large capital gains, or whose managed fund indicated a large capital gain during the year.
We will also provide advice, rulings and fact sheets to assist people involved in share buy-backs. At the other extreme, we will conduct reviews or audits of around 6,000 at-risk cases.
Tax obligations of high-profile and high wealth individuals
We remain concerned about individuals not lodging returns and forms – especially taxpayers with high tax bills, promoters of tax schemes, those using tax havens, and those influential in the wider community.
In 2006-07 we will have a special focus on high income individuals, including reviewing the tax affairs of some senior company executives whose total remuneration exceeds $1 million. We will examine incentives such as options, rights issues, cash bonuses and non-income capital benefits. Audits will be conducted where we identify a high risk of omitted or under-declared income, or inappropriate claims for deductions or off-sets.
Aggressive tax planning schemes
Aggressive arrangements to be scrutinised in 2006-07 include those relating to capital protected products and prepaid service warrants.
International tax issues
We will examine Australian residents who fail to disclose overseas capital gains or income from employment, pensions, dividends, interest or rent. Profits accumulated in overseas investments (including companies and trusts) that are subject to Australian tax will also be scrutinised.
Another focus will be non-residents who fail to declare Australian capital gains, for example, from real estate and share transactions, or rental, employment or pension income. We will contact 1000 individuals who appear not to have declared such income.
To address the misuse of tax havens by individuals, we are using information about international flows of funds to identify non-compliance, including non-lodgment of returns, targeting the offshore and onshore promotion and facilitation of haven-based arrangements which rely on bank secrecy, and scrutinising the returns of individuals who use offshore credit and debit cards.
Again our main focus is to provide micro businesses with the information and support they need to comply. We will identify practices that are high risk and alert businesses to these, and take firm but fair action against those who deliberately fail to comply.
Compliance issues range from poor record keeping and tardiness paying tax debts and meeting lodgment obligations, through to cash economy activity.
In 2006-07 we will improve our systems so we can resolve issues much faster for micro business and put more effort into helping new businesses develop and apply sound tax management practices.
Poor record keeping
A significant number of micro businesses are failing to keep adequate records to support their returns. This year we will phone or visit 13,000 new and established micro businesses to help them understand their record keeping obligations and offer support such as free e-Record record keeping software and record keeping workshops. At the other extreme, where a business disregards our advice and their records remain unsatisfactory despite our offers of help, we will apply the penalties available under the law.
Cash economy participation
Last year, our cash economy compliance activities raised $82.1 million in total liabilities. In 2006-07, our cash economy investigators will focus on the building and construction industry, used motor vehicle wholesalers and retailers, restaurants, cafes and take-aways, licensed hotels and registered clubs, the adult industry, horse racing and fishing.
We’ll contact over 55,500 micro-businesses including writing to those reporting amounts outside industry norms in their activity statements, making unannounced visits to check identification and registration details and audits.
To identify omitted cash, we are increasingly using third party data such as records from AUSTRAC, Centrelink, motor vehicle auction houses, local councils, state government licensing data and racing industry payment data.
We remain concerned about cash transactions between businesses and consumers because of the potential for work to be done ‘off the books’. In response, we are using auction house data to identify and follow-up roadside motor vehicle sellers, matching appointment and quote books to invoices for consumer transactions, tracing owner builder transactions using local council records and matching information from trade suppliers to businesses.
Two recent examples show the benefits of using third party data.
Example 1: Publishing company cheque cashing scam
Using third party data, we identified a publishing company that omitted $462,000 from its business accounts through the use of a cheque cashing facility. The company made a voluntary disclosure when contacted, and we also became aware that this practice was being promoted by word of mouth. The revenue raised was around $219,000 (including penalties) and we are currently investigating several related cases.
Example 2: Landscaper pays ‘cash in hand’
A past employee of a landscaping business reported to us that many of the employees were regularly being paid “cash in hand” amounts of around $150 and that 75% of the business income was for cash. On investigation, we found major discrepancies between financial institution records and amounts returned in tax returns and activity statements. The business operator was in the habit of transferring cash between various trading and private accounts (including credit card and TAB accounts) to pay wages, and was not accounting for business income. We identified further undisclosed income using AUSTRAC data. The extra liability established (including penalties) was $328,000.
Meeting lodgment obligations
A small proportion of micro businesses fail to lodge activity statements on time, however, a larger proportion fail to lodge income tax returns on time. Businesses that can expect to hear from us this year include those in tax, law, sports promotion, arts and entertainment and those in industries where international, cash or criminal dealings are common.
Managing tax debts
At 30 June 2006, there were around 885,000 micro business collectable debt cases to the value of some $6.84 billion. This accounts for almost 70% of total collectable debt.
While I am still very concerned about this level of debt there is some encouraging news on the debt front. We have reduced the rate of growth of total collectable debt from 27.7% in 2004-05 to 6.4% in 2005-06.
This is largely due to earlier intervention on new debts, faster follow up in cases of missed payments and escalating debt, and firmer action where taxpayers chose to either ignore Tax Office demands or continually default on promises to pay.
We have also trialled some new initiatives to re-engage taxpayers, including contacting people after hours and using ‘dialler technology’ (which filters out wrong numbers, busy signals and fax lines and automatically transfers connected calls to our officers). These strategies have shown some very promising results to date. At 17 July 2006, through dialler technology alone, people had made around 12,000 promises to pay by instalments, or in full, to the value of some $230 million.
We have also asked an external debt collection agency to help us to collect debt below $7,500. That trial finished on 30 June 2006 and we are currently analysing the results.
Once we have all the results from these trials we will look at how they may be able to contribute to improving our debt collection strategies overall.
Capital gains tax
We will scrutinise compliance with capital gains tax obligations focusing on the changes to the small business concessions announced in the 2006 Federal Budget and the eligibility requirements for small business concessions.
Activities include comparing external data with tax returns, such as details of property, shares, charter boats and the fishing industry. Another priority is monitoring asset disposals and transfers particularly for superannuation funds. We are identifying cases that involve aggressive tax planning, inappropriate valuations or complex structures designed to avoid or minimise capital gains tax.
International tax issues
We will make more effort to help micro businesses understand and comply with their international tax obligations. Conversely, businesses that deliberately fail to comply can expect fair but firm action. Attention will be paid to the use of tax havens to conceal assets, launder money, or reduce, avoid or evade tax, and the promotion of aggressive tax planning schemes that use international transactions.
Goods and Services Tax
This year we will check 55,500 GST refunds and conduct 780 comprehensive audits where serious evasion and fraud is suspected. We will also contact micro businesses to check 7,100 activity statements, and conduct 600 reviews and audits dealing with GST non-compliance in property transactions.
Other micro business priorities
Other priorities for micro business include monitoring compliance with the new fuel tax credit arrangements, the entrepreneurs’ tax offset, employer obligations and fringe benefits tax obligations.
Tax agents
Tax agents can expect to hear from us if their clients have a high incidence of inaccurate claims or mistakes, or are operating outside industry norms. However our main focus with tax agents is to help them provide good services to their clients so as to positively influence their compliance behaviour.
We foster voluntary compliance among small to medium enterprises by providing information and support to help businesses comply. We identify and raise awareness of high risk practices and take firm but fair action in cases of deliberate non-compliance.
Compliance issues vary from poor record keeping, especially regarding unusual or infrequent transactions (such as international transactions, purchases or sales of assets, loans to shareholders) to late lodgment of income tax returns, particularly by businesses making a loss.
In 2006-07 we will conduct 780 income tax reviews and 830 audits of small to medium enterprises. We will scrutinise losses, capital gains tax, capital management, service trusts, phoenix arrangements, and the property, building and construction industry.
Lodgment obligations
Small to medium enterprises contribute a significant amount of revenue and can pose a high risk if they fail to lodge. In 2006-07 we will ensure those controlling small to medium enterprises meet their personal lodgment obligations and follow up high-wealth individuals who have not lodged returns, or not provided all the required information.
High wealth individuals – new activities and case studies
As mentioned, a key priority for 2006-07 will be monitoring the compliance of around 1,000 of the wealthiest taxpayers including 900 people who each control net wealth of $30 million or more, and 100 people who each control net wealth close to $30 million or control high-value assets and have high profiles in the wider community.
Attention is being paid to arrangements suggesting aggressive tax planning, such as those that attempt to limit the capital gains tax that on the face of things appears to be payable, and transactions conducted, or property held offshore, in low-tax jurisdictions.
More high wealth individuals will face a comprehensive risk assessment this year. We’ll seek information from high wealth individuals and their entities about their structures and business affairs. In 2005-06 we conducted 61 comprehensive risk assessments of high wealth individuals and this will more than double in 2006-07 to 150 comprehensive risk assessments. We also expect to commence more audits. As at 30 June 2006, our High Wealth Individuals Taskforce had 37 audits underway. A further 35 audits are expected to commence this year.
We are also improving our techniques to detect undeclared income by high wealth individuals. This will include monitoring the media more closely, seeking information offshore, making better use of external databases, using new technology to identify risks and using expanded tax returns. In a new strategy, we will meet with high wealth individuals or their advisors to discuss our risk findings. We will also have an increased focus on prosecution, subject to our guidelines with the Commonwealth Director of Public Prosecutions.
Some recent examples demonstrate the extent to which some high wealth individuals have tried to avoid their tax responsibilities.
High Wealth Case Study 1: Share Trading – Offshore Concealment
Evidence gathered by our High Wealth Individuals Taskforce indicated that foreign bank accounts subject to banking secrecy laws and entities established in other tax havens were used to conceal the assets and income receipts. We have issued amended assessments totalling tens of millions of dollars.
High Wealth Case Study 2: Capital Gains Avoidance Arrangement
Rather than sell an asset directly to a third party, a high wealth individual underwent a complex, multi step, restructure to transfer the asset to a newly created entity prior to the sale of the new entity (now holding the asset) to the third party. The purpose of these artificial transactions was to transform a taxable gain of $50 million to a tax loss. The arrangement was designed to circumvent the provisions in the law that prevent the manipulation of the capital gains tax rollover relief provisions while at the same time artificially increasing the tax cost of the asset sold from $10 million to $60 million. The matter was taken to the Administrative Appeals Tribunal and the taxpayer recently withdrew the action and has agreed to pay the tax in full which is expected to exceed $15 million.
More generally, it concerns me that some taxpayers have thought that they could invest and trade offshore without meeting their Australian taxation obligations. We have a variety of methods, including the cooperation of overseas tax authorities, to identify both major transactions occurring overseas and the existence of overseas funds.
Losses
We are continuing to review a relatively large number of small to medium enterprises that may be generating and recouping losses through various means such as claiming inappropriate and inflated deductions, under-reporting income, profit-shifting and misclassifying losses as capital or revenue.
Capital gains tax
Enterprises that deliberately manipulate their business affairs to minimise a capital gain or obtain a capital gains tax concession under the law can expect scrutiny to verify compliance with the tax law.
Service trusts
We are educating and helping small to medium enterprises that use service trust arrangements to ensure they understand and comply with their obligations under the law, which were explained in a ruling and companion guide released in April 2006. Most professionals who use service arrangements have until 30 April 2007 to review them to determine whether they meet acceptable parameters. If their arrangement generally reflects the guidance provided in our ruling and guide, there will be little risk of an audit.
Property, building and construction industry
Due to continuing poor compliance by some in the property and building and construction industry, we will concentrate on property developers who claim excessive deductions to reduce profits or sell to associates at less than market value. We are also examining cases where developers incorrectly categorise trading stock as investment capital, or fail to comply with GST obligations.
International tax issues
Our main focus here is on onshore promoters, their intermediaries and associates who market or support tax haven schemes.
Good and services tax
We are finding many that enterprises with income exceeding $20 million that have grown rapidly over the past year lack adequate GST controls and systems. These will be a key focus in 2006-07 with 1200 to receive questionnaires and 200 high-risk businesses to be audited.
Similarly, infrequent and sophisticated transactions such as financial supplies are often not reported correctly for GST purposes, particularly when an entity undertakes a public share float for the first time. We will review 50 small to medium enterprises which floated public shares on the Australian Stock Exchange in 2004–05.
Around 19,000 GST refund claims will be checked in this sector and we’ll investigate enterprises that appear to have under-reported GST or over-claimed input tax credits.
Cash economy audits
We intend to review and audit around 800 small to medium enterprises mainly in building and construction, licensed hotels, registered clubs, horse racing and fishing to detect undeclared income. We’re also establishing whether the accumulated wealth and lifestyle of the individual business owner is consistent with their reported income.
Aggressive tax planning
Comparing information provided by small to medium enterprises with other data for evidence of aggressive tax planning practices will assist us to identify:
- schemes to avoid tax through the artificial use of corporate limited partnerships or artificial trust and partnership arrangements
- schemes to avoid the operation of the shareholder loans provisions
- employee benefit arrangements designed to obtain benefits not intended under the law
- property arrangements designed to avoid or reduce GST or inflate input tax credit claims, and
- non-profit structures being used inappropriately to obtain tax benefits for individuals or their associated entities.
Payment obligations
Generally small to medium enterprises have a good record of paying their tax on time. However, we are seeing a significant number of enterprises with a tax debt exceeding $100,000. We are renewing efforts to work with these businesses to resolve this, but where a business refuses to enter into reasonable payment arrangements, we will be forced to take firmer recovery action.
Large business makes a significant contribution to Australia’s revenue system paying around 36% of total tax paid under the laws we administer. We will continue to provide large businesses with advice, information and support to help them comply and to minimise their risks. However, we will profile all large businesses to identify transactions and tax outcomes which require further enquiry and conduct risk reviews and audits.
Company income tax collections are expected to grow from almost $50 billion in 2005-06 to over $56 billion in 2006-07. Many Australian corporates operate internationally and their dealings feature large mergers, acquisitions and divestments which often yield significant profits. Therefore, monitoring tax payments will continue to be an important function for us this year. Tax payments which appear to be at odds with accounting profits (including capital gains on divestments) are likely to attract our attention.
Some businesses have also relocated routine and significant functions, assets and risks to low cost and sometimes, low tax jurisdictions. We’ll be working with those businesses to determine the facts and to verify the commercial drivers behind the moves. Capital gains tax, transfer pricing, cross border financing and GST matters will be risk assessed and reviewed or audited where appropriate.
In 2006-07, there will be around 75 significant income tax audits in the large business sector to ensure that increased profits are translating into appropriate tax law outcomes – especially in mining, resources and banking.
We also continue to audit large businesses in relation to the margin scheme and financial supply issues, and check that large businesses have adequate internal controls and systems to meet their GST obligations.
Other priorities include fostering a more cooperative relationship with large businesses and improving our capability and processes for dealing with large businesses and their representatives. We are also aiming to complete audit cases within two years, while achieving fair, sustainable outcomes that align with the intent of the law.
This year we will hold a ‘Large Business Tax Symposium’ (29-30 August) featuring the launch of an updated version of the Large Business Compliance Booklet. This will include the key steps in our audit processes and the risk issues that attract our attention. We remain committed to regular meetings involving representatives of the top 100 corporate groups and senior tax officers.
In summary, major activities for 2006-07 in the large business sector include:
- supporting the priority private rulings program, and applying best practice to other requests for advice
- strengthening our processes for consultation, collaboration and co-design with large business representative bodies
- piloting forward compliance agreements
- reviewing losses to determine whether they have been correctly incurred and deducted
- reviewing significant acquisitions and divestments especially the tax outcomes of private equity investment groups, infrastructure groups and financial advisers to businesses conducting significant acquisition or divestment transactions
- reviewing the tax treatment of financial products such as hybrid securities, and transfers of taxable contributions from superannuation funds to other financial entities
- reviewing compliance with the consolidation regime,
- reviewing businesses, particularly foreign-owned businesses, that had significant decreases in effective tax rates in the 2004-05 year
- scrutinising business restructuring where corporate group functions, assets and risks are relocated to offshore related parties
- checking that businesses have appropriate systems to detect international facilitation payments so that deductions for expenses and input tax credits are properly claimed, and
- checking that businesses have internal controls and systems in place to properly account for GST.
Schemes promoting early access to superannuation have been a concern for several years. In 2006-07 we will continue to work closely with the Australian Securities and Investment Commission to stop the promoters of early access schemes. Last year we identified 24 promoters and nine associates of early access schemes and have disqualified 16 to date with more in progress. This year we will focus on promoters who are still active and expect to conduct 300 reviews.
We continue to provide a mix of service and regulation in relation to superannuation. For example, we are helping trustees of self managed superannuation funds understand their obligations. On the other side of the coin, we are reviewing high risk funds as well as following up on auditor contravention reports.
In order to protect employees, we will follow-up employee information on employer obligations under the superannuation regime.
We will also implement the Government’s proposed changes to superannuation.
We have a strong commitment to supporting tax practitioners, demonstrated by some of the initiatives planned for 2006-07:
- collaborating with tax practitioners and their representatives to design and deliver improved working arrangements, products and services
- co-designing the 2007–08 and future lodgment programs with tax practitioners
- building our relationship with bookkeepers, and providing products and services that help increase their capability
- working with professional bodies to strengthen tax agent capabilities and skills such as through shared training programs, and
- co-designing with the tax profession practical arrangements to support the Australian Government’s announced intention of modernising the tax agent regulatory system.
We will however also monitor tax agents whose clients have claims that reflect a high incidence of errors, or claims above industry norms, and where appropriate review the returns of their clients. We will also follow up late lodgment or payment by tax agents in relation to their own tax position.
In 2005-06, there were 100 court convictions for serious tax evasion and fraud and of those, 55 received prison sentences. One case involved three principals of a fashion business, who failed to declare $15 million in sales. Each received a jail sentence of at least eight years.
In another case, three accountants who devised a tax fraud that resulted in a loss of nearly $27 million, were each sentenced to five years in jail. During the course of the accountants’ appeals, Justice Steytler, in the Court of Appeal Division of the Supreme Court of Western Australia, cited the following comments of Justice Vincent in Director of Public Prosecutions (Commonwealth) v Goldberg (2001) 184 ALR 387 at 394 [32]:
Tax evasion is not a game, or a victimless crime. It is a form of corruption and is, therefore, insidious. In the face of brazen tax evasion, honest citizens begin to doubt their own values and are tempted to do what they see others do with apparent impunity.
Project Wickenby
Project Wickenby, which is investigating cases of alleged widespread and systematic tax avoidance and evasion, remains a major focus. The Tax Office is the lead agency in this taskforce, in collaboration with the Australian Crime Commission (ACC), the Australian Federal Police, the Australian Securities and Investments Commission and the Commonwealth Department of Public Prosecution.
Last month the Treasurer announced the first arrests by the ACC and laying of charges of conspiracy to defraud.
By publishing the Compliance Program, our aim is to promote voluntary compliance by informing the community of what we see as risks to how the tax system is intended to operate and our strategies for addressing the causes for non-compliance with the tax system. Being open and accountable may itself have a salutary effect on compliance, and importantly instils community confidence in the administration of Australia’s tax laws.
The publication of our compliance program is also an invitation to the community to provide feedback to us on the risk management choices we have made.
I encourage and look forward to a heightened level of engagement by the community and representative bodies in the care and management of Australia’s revenue system.
1 As said by Garry Addison, senior tax adviser of CPA Australia "The ATO deserves credit for being willing to publish its compliance plan, and it represents a move away from the 'gotcha' mentality we used to see".
Last Modified: Thursday, 17 August 2006
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