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  • Resolving disputes

    In 2017–18, we received 842 objections and finalised 767 objections. The number of objections allowed in full was 207 (27%), the number allowed in part was 173 (22.5%), and the number disallowed was 178 (23%). A significant proportion of the objections were withdrawn or were invalid (22.5%).

    The number of GST objections lodged continues to decline, and it fell by another 2% in 2017–18. Clients in the building and construction industry and cash economy are the major cause of objections. We have also seen a number of objections challenging our interpretation of the law, particularly from several of the ‘big four’ accounting firms. There are currently around 200 cases looking at entitlements to input tax credits for reimbursements and employee entitlements.

    In 2017–18, we continued to receive objections in the precious metals industry. While we have addressed the fraud that was taking place in the industry by introducing a reverse charge, a number of objections remain outstanding, and several cases are in litigation. A number of audit cases will be finalised over the coming months; this is expected to cause an increased number of objections relating to the precious metals industry.

    We introduced and continued a number of initiatives in 2017–18, including:

    • Dispute Assist – this is support and advice for unrepresented small businesses, to help with the dispute process. So far we have completed around 20 cases and the initiative has been recognised as being useful for small business.
    • Alternative dispute resolution – this has been running for a number of years and seeks to resolve a dispute at the audit stage. We estimate that successful early dispute resolution can result in combined savings to the ATO and the client of around $50,000.
    • Fast intensive triage – this involves early action on a case to quickly assess if the objection is valid or invalid. Case officers then contact the taxpayer (usually within 10 days of receipt of the objection) to advise them on its validity. As most complaints on objections relate to timeliness, this has reduced complaints significantly.

    These initiatives have also helped to improve the client experience and the quality of objections. At the same time, we continue to focus on preventing disputes, and adopting early intervention alternative and dispute resolution approaches wherever possible, including settlements.

    Figure 3: Objections received 2013–2018

    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 four years due to continuing improvements in our early engagement strategies. The graph shows the number of objections received each year from 2012–13 to 2017–18. The numbers are: 2012–13 1,893; 2013–14 1,353; 2014–15 1,215; 2015–16 1,150; 2016–17 859; 2017–18 842.

      Last modified: 18 Mar 2019QC 58283