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  • Schedule C: Monitoring and review arrangements

    Our relationship with scrutineers, such as the Australian National Audit Office and the Inspector-General of Taxation, are important in ensuring we maintain community trust and confidence in the GST system.

    Reporting arrangements

    All reporting obligations to the GST administration subcommittee (GSTAS) through the GST policy and administration subgroup (GPAS) have been met.

    The following GST administration reports were provided to GPAS during 2015–16:

    In terms of ATO governance for GST, specific and formal quarterly ATO GST Product Committee meetings chaired by the Deputy Commissioner of Indirect Tax were held. The purpose of those meetings was to monitor the performance and conformance of the GST product.

    Independent reviews of GST

    The Australian National Audit Office (ANAO) tabled its report on Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 2015External Link (report number 15 of 2015–16) on 17 December 2015. There were no negative findings against the ATO management of the incorrect reporting cases risk (also known as Integrity of Business System risk). The ANAO also found we had adequately addressed the risk associated with non-compliance with section 83 of the Constitution for payments made from special appropriations, special accounts and annual appropriations in relation to GST.

    In its review of the strategies used to address the Cash and Hidden EconomyExternal Link, the ANAO found the program is well aligned with international best practice. In agreement with the recommendations, we will be designing a range of indicators and targets to measure the success of the program. We have also undertaken academic research to test a range of interventions in a behavioural economics laboratory environment that will help us shape future empirically based business and community interventions as part of our overall approach.

    We continue to collaborate with the Inspector-General of Taxation (IGT) and progressively implement the nine major recommendations from the review into ATO’s administration of penaltiesExternal Link, which affects GST shortfall penalties. During 2015–16 we updated our standard penalty text and procedures, as well as simplified templates to improve our written communications to taxpayers in relation to penalty decisions. Penalty training has been delivered to improve staff capability for penalty decision making and a minute has been issued to staff regarding evidence gathering.

    The ANAO audit of the ATO’s Performance in Meeting Revenue Commitments from Compliance Measures commenced in September 2015 and is still in progress. The audit objective is to assess the effectiveness of the ATO in achieving commitments established under specific Budget-funded compliance measures, including the GST compliance program – working together to improve voluntary compliance as announced in the 2010–11 Budget; GST compliance program two year extension in the 2012–13 Budget; and GST compliance program three year extension in the 2015–16 Budget.

    GST Voluntary Compliance Program benchmarking

    The GST Voluntary Compliance Program benchmarking research continued during phase six (2015–16) of the program. The research monitors businesses’ attitudes towards GST, related behaviours and barriers to compliance. Please refer to Research results.

    Audit arrangements

    The costs associated with administering the GST are subject to independent audit by the ANAO. The ANAO will commence the special purpose audit of GST costs and systems for 2015–16 in December 2016.

    All previous audits have resulted in the ANAO issuing an unmodified audit opinion.

    Payment compliance behaviour

    An online trial was conducted to understand the impact of penalties and sanctions on taxpayers’ bill prioritisation and intention to pay tax (including GST) in late 2014–15. A choice based methodology was used to analyse participants’ decision making when presented with specific scenarios (hypothetical choices). Findings provided a view of likely payment compliance behaviour to inform and shape ATO products and services. Research conducted under Wave 2 of the program in September 2015 found that the size of a bill affected a taxpayer’s intention to pay. Taxpayers had more intention to pay smaller bills and intentionality dropped off once the bill exceeded a ‘tipping point’. This point varied depending on the type of tax and taxpayer. The research showed wages were prioritised over other debts, including GST. Overall, businesses that had a tax agent, and no tax debt history, had a significantly higher intention to pay GST. The research also found that providing more flexibility will help some taxpayers meet their tax obligations.

    ATO corporate surveys

    Perceptions of fairness in disputes

    One of the guiding principles of our reinvention is ‘fair and respectful treatment’ of the taxpayer. Fairness is a key factor that can influence people’s attitudes to paying tax, and is central to our goal of improving the client and staff experience.

    The ATO has now undertaken seven quarterly waves of research. Over this time, the research has evolved from understanding perceptions of fairness following a dispute (audit sourced objections and litigation) in the individual and micro business markets, to understanding interactions across all client engagement activities and across all market segments.

    Overall perceptions of fairness have remained stable (based on finalised cases from July 2014 to March 2016). Five key drivers of fairness have emerged from the latest results, providing us with defensible community views of where we should focus our organisational investment:

    • providing a sense of control over the way taxpayer issues are handled
    • reducing cost of compliance (time, money, resources)
    • taking taxpayers’ personal circumstances into account
    • ensuring ATO internal discussions are perceived as transparent
    • keeping taxpayers informed on the progress of their issue.

    We will maintain an ongoing focus on fairness, monitored through corporate performance measures for disputes, with quarterly surveys scheduled throughout 2016–17.

    ATO perceptions and satisfaction survey

    The ATO Corporate Perceptions Survey is designed to provide us with a more sophisticated understanding of taxpayers’ perceptions. This informs our planning and reporting to provide the best possible client experience and improve satisfaction for the taxpayer by listening to what the community wants. Specifically, the survey provides overall community measurements of:

    • our reputation
    • our service delivery performance
    • key social norms that affect willing participation in the tax system.

    Survey participants include clients who have had recent contact with us, a sample of the wider general community, the business community, and tax and BAS agents.

    Service interactions for the 2015 calendar year show around three quarters (74%) of those surveyed were satisfied with the quality of the service they received. They were less satisfied with ATO digital services, although current research indicates improvements across ato.gov.au with significant increases in various areas of satisfaction, reliability and clarity of information, with fewer issues encountered by users. We continue to expand our digital services, please refer to Encouraging participation for a few examples of what we released in 2015–16.

    Those who had a recent service experience with the ATO viewed us more favourably on a range of reputation measures such as integrity, fairness, professionalism and accountability.

    These results will assist us to measure the impact of ongoing work to improve the way we interact with our clients.

      Last modified: 20 Apr 2017QC 51810