Compliance outcomes
Table 2.1: Strike rate by market segment (Core indicators)
Measure
|
2016–17
|
Overall strike rate
|
69%
|
Micro businesses
|
70%
|
Small and medium businesses
|
72%
|
Large businesses
|
51%
|
Government
|
67%
|
Not-for-profit organisations
|
69%
|
Other
|
31%
|
Strike rate by market segment is a new measure. The strike rate (percentage of cases leading to re-assessment) is an Organisation for Economic Co-operation and Development (OECD) measure, which can indicate the effectiveness of case selection in detecting 'correct reporting'. These results do not include bulk correspondence cases.
Table 2.2: Refund integrity strike rate by market segment (Core indicators)
Measure
|
2016–17
|
Overall refund integrity strike rate
|
64%
|
Micro businesses
|
65%
|
Small and medium businesses
|
51%
|
Large businesses
|
40%
|
Government
|
57%
|
Not-for-profit organisations
|
60%
|
Other
|
87%
|
Refund integrity strike rate is a new measure. Significant costs are carried by both government and business because of the time lag involved when a refund is stopped, including delayed cash flows and GST administration costs. This measure will over time indicate if improvements have been made to the ATO’s risk-based audit selection strategy.
Table 2.3: Compliance liabilities and collections (Core indicators)
|
2016–17
|
Measure
|
GST tax liabilities
|
Total cash
collection
|
Cash collection
rate
|
Total compliance liabilities raised, and cash collection, and cash collection rate by market segment
|
$2,895m
|
$2,749m
|
65%
|
Micro businesses
|
$1,301m
|
$1,334m
|
58.8%
|
Small and medium businesses
|
$1,021m
|
$889m
|
66%
|
Large businesses
|
$467m
|
$450m
|
79%
|
Government
|
$8m
|
$2m
|
2.5%
|
Not-for-profit organisations
|
$61m
|
$63m
|
95%
|
Other
|
$37m
|
$11m
|
16.5%
|
This year we had a total of approximately $288 million in large 'outlier' cases and in 2015–16 we had approximately $474 million. Cash collections include amounts raised in previous financial years but collected during the financial year specified. The cash collection rate is based on current year collections, only, as a percentage of current year liabilities.
Outlier cases are defined as a GST adjustment greater than $20 million.
Table 2.4: GST registrations (Core indicators)
Measure
|
2014–15
|
2015–16
|
2016–17
|
Compulsory GST registrations compared with potential GST registrations based on income tax returns data
|
95.9%
|
95.4%
|
94.7%
|
The ratio of compulsory GST registrations to potential GST registrations has dropped slightly to 94.7%. The fall was mainly in non-individual entities across most industries.
Note: This indicator is reported one year in arrears due to reliance on corresponding income tax data.
Table 2.5: BAS lodgment (Core indicators)
Measure
|
2014–15
|
2015–16
|
2016–17
|
Total BAS lodged (including yearly)
|
89.9%
|
89.8%
|
87.6%
|
% lodged (monthly)
|
93.7%
|
94.0%
|
93.2%
|
% lodged (quarterly)
|
88.3%
|
88.0%
|
85.3%
|
Total lodged on time (including yearly)
|
78.0%
|
77.7%
|
76.4%
|
% lodged on time (monthly)
|
82.9%
|
83.2%
|
83.5%
|
% lodged on time (quarterly)
|
76.0%
|
75.3%
|
73.5%
|
On-time lodgment of monthly BAS has steadily increased over the past few years. However, a slight decline in monthly overall lodgment occurred this year. There has also been a decline in on-time and overall lodgment for quarterly BAS.
Table 2.6: GST returns filed by intermediaries (Supplementary indicators)
Measure
|
2014–15
|
2015–16
|
2016–17
|
GST returns filed by intermediaries or tax agents
|
44.4%
|
45.8%
|
45.6%
|
This is an international benchmark measure which indicates the usage of tax intermediaries or tax agents, or both, for the filing of GST or VAT returns.
Table 2.7: Objections (Supplementary indicators)
Measure
|
2014–15
|
2015–16
|
2016–17
|
Number of objections
|
1,214
|
1,150
|
859
|
Objection rate
|
7.43%
|
7.89%
|
5.62%
|
Number of litigation cases received
|
106
|
67
|
53
|
Number of objections which result in litigation
|
na
|
na
|
46
|
A range of factors can impact on the number of objections received, including improvements in the strike rate (or improved risk identification). The number of objections has declined over the last three years.
The number of objections received in a year divided by the number of audits with a financial adjustment finalised in the year become the objection rate, which can provide an indicator of objection levels and trends over time.
Litigation of tax disputes is conducted either in the Administration Appeals Tribunal (AAT) or the Federal Court in the first instance, with appeals to the Full Federal Court and by special leave to the High Court. Over the last three years, the number of litigation cases received has declined significantly.
Number of objections that result in litigation is an ATO-wide Information and assistance services performance measure, with the 2016–17 target being 20 per thousand (2%). It is a new measure. Although higher than the ATO average, GST objection and litigation rates are declining and this number should also decline over time.