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  • KPI 5 performance summary

    Regulators are open and transparent in their dealings with regulated entities

    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)

    5.1

    Ensure risk-based frameworks are publicly available in a format which is clear, understandable and accessible.

    n/a(1a)

    5.2

    Be open and responsive to requests from taxpayers regarding the operation of the tax and superannuation systems, and approaches implemented by the ATO.

    S7, S8

    5.3

    Ensure performance measurement results are published in a timely manner to ensure accountability to the public.

    n/a(1a)

    5.4

    Ensure disputes are dealt with in an open and transparent manner.

    S6

    Note 1a: There are no specific metrics for measures 5.1 or 5.3, as per the ATO Regulator Performance Framework.

    Self-assessment rating: Good

    This assessment is based on the results of the metrics relating to each measure and the examples of how we are open and transparent in our dealings with regulated entities.

    Summary of metric results

    Performance declined for one of the three metrics for this KPI with two new metrics for 2018–19.

    We know that there is a very close correlation between perceptions of fairness and our timeliness. In the last financial year the average time to resolve objections increased from 65 days to 75 days which we see translating into a lower result for fairness.

    We know that to improve clients perceptions of fairness clients need to be contacted as soon as they lodge an objection, kept informed about the progress of their objection and ensure the objection is dealt with on a timely basis. To achieve this, we have over the last six months made material changes to the objection process, including the introduction of a new and significantly improved triage process and increased staff levels. It means a client lodging an objection today through the right channels will have their objection acknowledged within three days.

    We publish risk-differentiation frameworks and other advice regarding how we assess risk on ato.gov.au. Our published advice transparently outlines that:

    • we take a risk-management approach to compliance, differentiating our engagement based on our view of the relative likelihood (and consequence) of non-compliance
    • by differentiating our response, we can apply a range of treatments proportionate to risk we perceive, including contacting our clients to discuss matters of concern to us.

    We publish our performance for all our service commitments monthly on ato.gov.au, and report on the performance of the ATO in achieving its purpose annually. We also report on the performance criteria published in the Portfolio Budget Statements and our Corporate Plan through the annual performance statement included in the Commissioner of Taxation Annual Report.

    Activity-based examples

    The ATO has a number of initiatives designed to assist clients with their tax affairs. We provide public advice and guidance to help taxpayers understand their rights and obligations in a range of situations.

    Due to the complexity of tax and superannuation law, it is inevitable that some areas of disagreement will arise. Where a taxpayer disagrees with an ATO decision, they have the right to have that decision reviewed. At these times, the ATO provides a dispute resolution service to ensure consistent application of the law and fair outcomes for the community. Our approach is to engage with clients as early as possible, dealing with matters before they reach the courts.

    We implemented several dispute resolution initiatives this year, including:

    • an Independent Review for Small Business program pilot, designed to give small businesses an opportunity to have their audit with us reviewed before any assessments or amended assessments are issued
    • our Dispute Assist service, offering help to unrepresented individuals and small businesses with significant or exceptional personal circumstances
    • new National Tax Clinics operated by 10 universities for taxpayers who may not be able to afford professional advice or representation but are looking for independent guidance
    • a new Small Business Taxation Division of the Administrative Appeals Tribunal (AAT) developed in conjunction with the Treasury, the AAT, the Inspector-General of Taxation and Taxation Ombudsman (IGTO) and the Australian Small Business and Family Enterprise Ombudsman.

    We resolved over 26,000 objections, which represents less than 0.1% of over 37 million returns lodged. There were 441 applications for review or appeal to the AAT or other courts in 2018–19, with 102 decisions made either in relation to these applications or applications made in earlier years. The significant gap between the number of applications and actual decisions reflects the fact that most matters are resolved through alternative dispute resolution. For more information on the numbers of disputes, see Appendix 3External Link of the Commissioner of Taxation Annual Report 2018–19.

    To give the community confidence that the ATO is exercising sound judgment, we seek assurance from a range of channels.

    We sought independent assurance and advice from experts on the application of complex legal matters, and referred our most significant decisions on disputes for review. During 2018–19:

    • the General Anti-Avoidance Rules (GAAR) Panel assessed 28 matters, including share buy-back transactions, with the GAAR provisions held to apply in 10 matters
    • the Public Advice and Guidance Panel considered 7 matters, including employee travel expenses, work-related expenses for truck drivers, and GST relating to financial services
    • under the Independent Assurance of Settlements program, 16 reviews were finalised, with our actions considered to be fair and reasonable in 13 cases. For more details on settlement cases, see Appendix 3External Link of the Commissioner of Taxation Annual Report 2018–19.
      Last modified: 27 Feb 2020QC 61545