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  • 3 Our approach

    Encouraging participation

    Participation is largely driven by behavioural factors including community confidence in the system and the extent to which honest taxpayers find it easy to participate fully and meet their obligations.

    The vast majority of people and entities willingly participate, and we aim to make their experience as easy and as inexpensive as possible.

    We also want the community to have confidence in our ability to address non‑compliance and ensure the GST system is fair for everyone. For those who are not transparent or not willing to do the right thing, we will target and tailor compliance activities accordingly.

    Contemporary and tailored service

    In line with the goal of delivering a contemporary and tailored service to users of the GST system, we are enhancing and promoting our online transaction and tax guidance services.

    While the take-up of digital services is largely driven by user demand for services that are accessible, secure, easy to use and available 24x7, it also contributes to the efficient administration of the system in the interest of the community as a whole.

    Our online services continue to be improved, with a range of online tools and services rolled out in 2015–16 that integrate with systems people already use and are secure while being easy to access. These have been developed in consultation with stakeholders, including user groups and the Government's Digital Transformation Office (DTO), and aligns with the Government's Digital Service Standard.

    We continue to increase engagement with the community through social media – Facebook, Twitter, LinkedIn and YouTube videos. Using social media gives us real-time information and enables us to identify issues that are important or causing concern, so we can respond with help and support where appropriate.

    About 14% of the total calls we receive are GST-related (1.2 million calls during 2015–16). We answered 95% of tax agent calls within two minutes. We also answered 91% of general taxpayer calls within five minutes, up from 87% last year. Over 2 million taxpayers have now enrolled their voiceprints to verify their identity when they call us. This saves 48 seconds a call for these taxpayers, a saving of over 21,000 hours.

    We aim to meet the need of those operating a small business at any point in the small business lifecycle. In 2015–16, we began to send a new to business essentials email to all new ABN, and this now reaches around 30,000 new businesses each month. We also send follow-up emails quarterly over the first year.

    As part of a broader small business education program, we educate and support small businesses with the practicalities of how to go about meeting their GST obligations. Over 12,000 small businesses accessed this education and support in 2015–16, either face-to-face or online.

    In addition to the self-help tools and education products available, we continue to expand the information on our Small business newsroom. We emailed articles to over 1.1 million subscribers and published around 30 GST-related articles in 2015–16. These articles attracted over 145,000 web visits and included topics such as:

    • do you still need to be registered for GST?
    • planning to develop property?
    • thinking of importing or exporting goods or services?

    The small business assistance program continues to play an important role with over 1,760 small businesses assisted during the year. We also provided help and assistance to around 300 indigenous businesses. This service gives small business owners an opportunity to discuss specific tax issues or concerns with an ATO officer.

    Small business owners can also seek assistance through our after-hours call back service or the live web chat facility. With the introduction of this service as an alternative to a visit, and with the increase in self-help digital services available, we have continued to see a decrease in the number of face-to-face visits requested.

    Registrations and processing

    We help people to register correctly in the GST system and to exit the GST system when required. At 30 June 2016, there were 2.62 million active GST registrants, 0.4% fewer than 2014–15.

    During the year, we registered 345,014 new GST accounts and cancelled 346,592 GST registrations.

    The deferred GST (DGST) scheme allows registered importers to defer payment of GST on all taxable importations into Australia until the 21st day of the following calendar month. Approval is only granted if the importer has a history of good compliance, lodges a monthly BAS online, and pays BAS net amounts electronically.

    The number of importers registered to defer GST increased to 15,037 in 2015–16. A total of $25.4 billion in GST was deferred, an increase of 2.8% from last year.

    This year we:

    • approved 2,528 new deferred GST registrations
    • received requests to cancel 1,268 deferred GST registrations.

    By raising awareness of this scheme with tax agents, we saw registrations increase by 28.3%. Many of the new registrants have not taken up the opportunity to defer payment yet as deferred payments only increased by 0.3%. We are monitoring a potential surge in deferrals during 2015–16.

    During the year, we issued over 12.3 million original BAS and processed more than 10.2 million original BAS lodgments, 0.9% more than last year. We also:

    • banked 13.4 million BAS-related payments with a value of $251.9 billion.
    • issued over 1.6 million activity statement refunds with a total value of $50.1 billion
    • paid $3.8 million in interest on delayed refunds, 18.8% more than 2014–15

    Following the introduction of ATO Online in August 2015, the electronic lodgment rate for all BAS received in 2015–16 was 73.6%, a 6.0% increase from 2014–15.

    Managing debt

    In 2015–16, we achieved a gradual but sustained improvement in payment performance as we continued to focus on making it as easy as possible for businesses to pay on time or address any debt that arises.

    This contributed to the increase in the value of GST liabilities paid on time (an increase of 1.7%) and the reduction in collectable GST debt (a decrease of 2.6%).

    We estimate that, at 30 June 2016, GST collectable debt was $3.38 billion. Collectable debt is debt that is not subject to objection or appeal or to some form of insolvency administration. Total debt is estimated to be $4.98 billion.

    GST collectable debt growth was below the growth in GST revenue, with the ratio of GST collectable debt to net GST collections at 30 June 2016 being 5.9%, down from 6.4% at 30 June 2015.

    We are continuing to see improved outcomes for taxpayers and the community as a result of our reinvention program, including:

    • supporting businesses by making it as easy as possible for them to pay on time or address any debt that arises, especially through increased digital service offerings
    • recognising that viable well-run businesses may occasionally experience short-term cash flow issues that prevent them paying on time; to assist, we offer payment plans tailored to their individual circumstances
    • for the minority of businesses that don’t promptly address their tax debt, we take timely stronger action to prevent them from gaining an unfair financial advantage over the majority who pay on time.

    Our letters are being progressively redesigned and rationalised, based on best practice behavioural insights, to make them clearer and easier to follow. They are increasingly being delivered electronically via myGov accounts.

    The shift to digital is paying off. For example, of the taxpayers who entered into a payment plan after receiving a debt reminder letter via myGov, over two-thirds chose to do so online. This has contributed to the number of online payment plans more than doubling. Online payment plans are 22% more effective in collecting debt compared to payment plans entered through more traditional channels.

    We sent over 14,000 SMS payment reminders in December 2015 to businesses with a BAS payment plan instalment due during the holiday period. Clients who received an SMS reminder had a default rate of 4% less than those clients who did not receive an SMS reminder. The lower default rate equates to an additional 600 payment plans being maintained, which benefits both businesses and the ATO.

    Where people with outstanding tax debts fail to engage with us we are taking more timely action, including insolvency proceedings, to prevent those who don't pay from getting an unfair financial advantage over those who do.

    Figure 9: GST collectable debt by top five industries in 2015–16

    Figure 9 – GST collectable debt by top five industries This graph provides the top five industries with GST collectable debt for the financial years 2015–16. In 2015–16 the top five industries were Construction 27.5%, Professional, scientific and technical services 10.9%, Accommodation and food services 7.2%, Administrative and support services 6% and Manufacturing 5.6%.

    Industry codes legend

    Code

    Industry

    2015-16

    CON Construction 27.5%
    PST Professional, scientific and technical services 10.9%
    AFS Accommodation and food services 7.2%
    ASS Administrative and support services 6.0%
    MFR Manufacturing 5.6%

    Figure 10: GST collectable debt by market segment

    Figure 10 – GST collectable debt by market segment diagram This diagram shows GST collectable debt by market segment for 2014–15 and 2015–16. In 2014–15: micro 71%, small to medium enterprises 23%, large businesses 0.5% and other 6%. In 2015–16: micro 70%, small to medium enterprises 24%, large businesses 0.8% and other 5%.

    Guidance and advice

    The way we provide advice and guidance to taxpayers and their advisers is being redesigned with an emphasis on tailoring information to the needs of users according to their level of knowledge and the complexity of their questions.

    This involves providing new ways of navigating information so users can intuitively drill down as required from simple explanation to examples and detailed reasoning, to binding advice and ultimately the legislation.

    At one level this approach has involved introducing a website virtual assistant ('Alex') to answer a growing range of general tax enquiries. Alex went live in March 2016, following public testing on our beta website, and by 30 June had held over 270,000 conversations, averaging a first contact resolution rate of 75%. Alex learns through interactions – the more conversations, the more she will learn.

    We are engaging with users about priority issues for which we will provide public advice and guidance. As part of this, we are consulting earlier as we develop the ATO view on technical taxation issues that will be the subject of our public advice and guidance.

    We are partnering with academics and tax professionals to review the existing public advice and guidance products for their currency and ongoing relevance. Over time, these products will be revised or removed if no longer required.

    We continue to exceed our commitments to the community in providing ‘timely service’ and ‘for keeping taxpayers informed’ of the progress of their private rulings. In 2015–16, we finalised 730 GST-related private ruling requests, achieving 96% finalised within 28 calendar days of receiving all the necessary information. For the ‘keep me informed’ standard, we achieved 83% of private rulings against the 80% benchmark.

    During the year, we provided certainty to clients who sought our view on the application of GST to their circumstances by finalising our view on a number of key issues, including entitlement to refunds, going concerns, food classification, international transactions and backdating registration. The number of private ruling requests has remained consistent with 730 private ruling requests completed compared to 731 in 2014–15.

    We completed 5,345 guidance requests, an increase of 7% on last year. The spike was due to the introduction of the four-year time limit to amend or revise activity statements, as featured in the case study on the following page. We finalised 94% of the guidance requests we received within 28 calendar days.

    CASE STUDY: Contemporary engagement with the community

    For tax periods starting on or after 1 July 2012, businesses have a four-year period of review to amend or revise activity statements that differs from pre 1 July 2012 rules. Under those previous rules, businesses were able to notify the Commissioner of a credit entitlement to reserve their claim.

    We commenced a campaign in March 2016 to ensure tax agents understood the changes or could request assistance to help prepare.

    Previously we would have utilised existing communication channels including updating the material on our website. However, in line with our reinvention program, we prepared a multi-faceted communications strategy using existing and contemporary channels.

    This included updating information on our website, as well as publishing articles on both the small business and tax agents’ newsrooms. Presentations were given at external forums and we broadcast messages on Facebook and Twitter. We also developed a short animated video to illustrate how the period of review works. These initiatives were followed up with further communications addressing restrictions on backdating registration beyond four years.

    The campaign has been effective as the number of routine queries has decreased. This will allow us to start developing targeted strategies to deal with the more complex systemic issues that have been identified.

    We intend to implement similar communication strategies for all future law changes to ensure that we provide clients with timely guidance on the application of new law.

    End of example
      Last modified: 20 Apr 2017QC 51810