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  • Tax payment performance

    At the end of 2016–17, 88% of liabilities had been paid on time, down 1.4 percentage points from last year, and 96% of liabilities had been paid within 90 days of becoming due, consistent with 2015–16.

    Collectable debt was $20.9 billion, up from $19.2 billion in 2015–16.

    The 12-month rolling average of the ratio of collectable debt to net tax collections was 5.6%, not quite achieving the target of ‘below 5.5%’.

    These were reasonable results given:

    • a year-on-year increase of $1.8 billion in audit-raised liabilities, including liabilities flowing from the Tax Avoidance Taskforce, the Serious Financial Crime Taskforce, Operation Elbrus and Operation Nosean
    • the decrease in debt collection activities due to the lead-up to an ATO system upgrade in November 2016
    • the failure of storage hardware in December 2016, which impaired payment and debt-related activities into February 2017
    • the deferral of debt collection activities in April and May 2017 for those impacted by Tropical Cyclone Debbie in Queensland and northern New South Wales.

    Our long-term approach to delivering an improved payment experience includes a range of strategies already well under way:

    • a holistic focus on payment and debt prevention
    • comprehensive risk-based analytical models for increasingly tailored interactions
    • tailored campaigns targeting high-risk debtor populations
    • online and integrated payment solutions that make it easier to pay.

    Delivering contemporary and tailored services

    Our approach

    We take a purposeful approach to payment and debt, balancing support for clients trying to do the right thing with timely stronger action against those who don’t. This prevents them gaining an unfair financial advantage.

    Making it easy to pay on time

    We make it as easy as possible for clients to pay their tax on time using a wide range of tools, payment channels and self-serve payment options. For example:

    • clients can use the ATO app to identify their due dates, which they can load into their phone calendar so they receive a reminder before each due date
    • clients can manage their cash flow by pre-paying part or all of their income tax and activity statement liabilities
    • we issue SMS payment reminders before the due date to clients that are unlikely to pay on time or at all.

    Helping those with short-term cash flow issues

    We recognise that some clients may occasionally experience short-term cash flow issues that prevent them paying on time. To assist, we offer a range of tools and services to help make it easier for them to get back on track, including:

    • sending SMS payment reminders after the due date has passed
    • an automated phone service for payment plans for debts of up to $100,000
    • an online payment plan service for debts up to $100,000 for individuals and sole traders
    • a business performance check tool as part of the ATO app for business operators, allowing them to quickly check the financial health of their business
    • an online business viability assessment tool, which helps business operators determine whether their business is viable.

    Helping those facing challenging economic conditions or unexpected events

    We also recognise that clients can experience longer-term financial difficulties due to challenging economic conditions or unexpected events.

    We take an empathetic approach to working with these clients to get them back on track and offer a range of options, including:

    • remitting any penalties or interest charged during the time they have been affected
    • offering payment plans tailored to their individual circumstances, including interest-free periods.

    Recent examples include clients affected by:

    • floods
    • drought
    • restructuring in the Australian dairy industry
    • communities impacted by local business failures, such as Whyalla when Arrium went into external administration.

    Taking stronger action to maintain a level playing field

    Our preference is to help clients meet their payment obligations on time or address any debts that arise as early as possible, while they are manageable.

    For the minority of clients that don’t pay on time or engage with us to address their tax debt we take timely stronger action. This prevents them gaining an unfair financial advantage over the majority that pay and ensures a level playing field for all. Stronger action can include:

    • garnishees
    • director penalties
    • insolvency proceedings.

    To address businesses that are no longer viable or not cooperating with us, we are starting to use risk models to better target our legal recovery action. This prevents unviable businesses from putting suppliers, customers and employees at risk by trading while insolvent.

      Last modified: 30 Oct 2017QC 53757