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  • Encouraging compliance

    In addition to providing education and direct assistance, we have a number of strategies to encourage more people to comply voluntarily.

    Self-assessment allows people to assess the tax payable or refundable through the lodgment of their return. We continually make more information available for individuals by pre-filling their tax returns. This information is also used in our risk analysis models to identify individuals who are not lodging tax returns, failing to declare income, or lodging incorrect claims for deductions, offsets and other benefits.

    Over 90% of net tax collections in 2012–13 were received voluntarily from the community. We follow up returns that are not lodged by the due date, identify and review returns that may contain incorrect information or are missing information, and check some refunds. Only a very small proportion of returns require intervention.

    We take a risk-management approach to consider the relative likelihood and the consequences of potential non-compliance. Using models and analytics we can better focus our compliance action to reduce unnecessary disturbance to taxpayers and to identify taxpayers who need assistance in complying with their obligations more specifically. Our compliance activities include audits, risk reviews, investigations, voluntary disclosure campaigns, lodgment compliance, debt collection, and targeted campaigns to inform people of risks and action undertaken and ensuring they understand how to comply.

    For our largest taxpayers, we are working cooperatively to provide practical certainty in real time, with a number of products used to support this. These include our pre-lodgment compliance reviews, annual compliance arrangements and reportable tax position schedules. These assist in the early identification and resolution of issues and support our shift from post-lodgment compliance activities to a real-time engagement model for large taxpayers. Supporting this, we also have advance-pricing arrangements and mutual agreement procedures to provide certainty for large taxpayers with international dealings.

    We are focused on understanding our effectiveness and demonstrating the impact we are having across our programs and initiatives to help us improve. We have released online some examples of the work we do to provide insights into our effectiveness.

    Last modified: 02 Mar 2015QC 42695