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  • KPI 4 performance summary

    Compliance and monitoring approaches are streamlined and coordinated

    The following table shows the measures of good regulatory performance and the related metrics. The results of the metrics and analysis are outlined in the Appendix.

    Measure

    Description

    Metric(s)

    4.1

    Minimise frequency and impact of requests for information and coordinate with similar processes including those of other regulators.

    S11

    4.2

    Tailor information requests and only make when necessary, and only then in a way that minimises compliance costs to taxpayers.

    S12

    4.3

    Utilise existing information to limit the reliance on requests to taxpayers and share the information among other regulators, where possible.

    7, 16, A8, A9

    4.4

    Base monitoring and inspection approaches on risk and, where possible, take into account the circumstances and operational needs of taxpayers.

    A10

    Self-assessment rating: Good

    This assessment is based on the results of the metrics relating to each measure and the examples of how we streamline and coordinate compliance and monitoring approaches.

    Summary of metric results

    Performance either improved or met target for one of the seven metrics for this KPI with two remaining relatively stable, one showing a decline and three based on activities.

    There has been a significant increase in the use of the Australian Business Register (ABR) by government agencies and the community as demonstrated by the strength of the results. Results show a decline in the perceptions of our clients as to how we are integrating services better with other government agencies and whether we contact them unnecessarily. These results have highlighted the need to continue our focus on tailoring engagement according to circumstances and continuing to increase awareness in how we are working in collaboration with other agencies to integrate services.

    Activity-based examples

    The emergence of new technologies, including analytical tools, increased digitalisation, and unprecedented data and information flows, are creating fundamental and rapid change across the economy. This offers significant opportunities to enhance tax and superannuation administration, reduce the burden on the community and automate aspects of revenue collection. The ATO is increasingly becoming a ‘digital business’ to harness these new opportunities.

    The ATO collects information from a wide range of third-party sources, both public and private, and is expanding collection sources, as well as frequency of data sharing. We are working with other agencies to integrate multiple data sets to produce more accurate and useful data than that provided by single data sources. By combining insights from broadly sourced data sets, we can identify relationships, risks and behaviours previously unknown.

    For example, we have used ATO data holdings with:

    • ASIC data – which has increased our understanding and focus on ‘straw’ and ‘shadow’ directors, and high risk companies
    • big structured and unstructured datasets from the Panama and Paradise Papers – enabling us to identify previously unknown relationships, international risks and behaviours and make great progress in our tax avoidance taskforce work
    • information from external files and internal systems – enabling us to identify offshore tax evasion.

    We use the data and insights we gain from these processes to ensure people and businesses are complying with their registration, reporting, lodgment and payment obligations. We pre-fill in excess of 80 million transactions for a more streamlined experience and much greater accuracy in reporting. Each year we expand the information sources we use for pre-filling, with information on disposal of shares and units included for Tax Time 2018.

    To support individuals to correctly report income in their tax return, we use automated programs that identify and correct errors once a return is lodged checked against the third-party data we receive. This means returns are processed more quickly, reducing refund delays and the need to contact a taxpayer about the error. It also avoids potential debt issues at a later stage.

    By matching the data we collect to client records and using it to build our understanding of those clients, we are creating an enterprise view of client risk. This is an integrated whole-of-client, whole-of-system ‘risk profile’. In 2017–18, we completed the integration of our risk models for small business and individual clients.

    When a client’s history is added to their risk profile, the ATO is able to tailor the services clients use and interactions they have with us. In particular, this capability is being used to support the way we deal with clients who have overdue liabilities, providing a tailored experience based on their history with us to balance the needs of the revenue system with the circumstances of the client.

    The ATO has invested heavily in technologies that help us collect, store and use data to create benefits for clients and the community on a broad scale and at faster speeds. In order to manage our data, we improved our data infrastructure and the governance around it. We established our data and analytics roadmap outlining key strategies being delivered over four years; this commenced in early 2018. This four-layered program considers technology, data, capability and engaged business.

    We are transitioning to our new Enterprise Data Hub technology to efficiently integrate and store data from third parties with our taxpayer information. This technology is being supplemented with new capabilities to enable us to better manage less-structured information, and enhanced identity-matching capabilities.

      Last modified: 08 Feb 2019QC 57845