Show download pdf controls
  • 7. Compliance engagement

    We want to make sure everyone pays their fair share of tax, and that those who do the right thing are not disadvantaged by unfair practices. We support and educate taxpayers to encourage them to willingly meet their GST obligations, while detecting and dealing with those who deliberately avoid their GST obligations.

    Toward the end of 2019–20, our focus was on delivering tens of billions of dollars in much needed stimulus to the community. This resulted in a temporary adjustment to some of our compliance activities. We re-prioritised our resources and activities to meet emerging needs as the Government’s response was developed, and supported people who were suddenly unable to meet their GST obligations. We delivered the stimulus measures and assisted our clients to obtain all the concessions to which they are entitled.

    We maintained our focus on GST refund integrity, dealing with fraudulent activity and high-risk refunds. Staff undertaking pre issue GST refund reviews also checked client risks associated with the Cash Flow Boost and JobKeeper eligibilities.

    Our compliance activities raised $2.6 billion in GST liabilities in the year to 30 June 2020, compared with $3.2 billion in the year to 30 June 2019.

    Table 4: Compliance liabilities

     

    2015–16 $m

    2016–17 $m

    2017–18 $m

    2018–19 $m

    2019–20 $m

    GST liabilities raised

    3,295

    2,895

    3,014

    3,173

    2,645

    GST liabilities raised – business as usual

    2,360

    1,791

    1,809

    1,504

    1,077

    GST liabilities raised – GST compliance program

    935

    1,104

    1,205

    1,669

    1,568

    GST compliance program

    $10 billion GST revenue to the states and territories from 1 July 2010 to June 2020.
    $1.6 billion was raised from compliance and lodgment enforcement activities in 2019–20, exceeding our planned commitment of $740 million.  

    The GST compliance program (previously called the GST voluntary compliance program) was established in 2010. It has been a significant part of the ATO’s administration of the GST, returning approximately $10 billion in GST revenue to the states and territories through to June 2020. The program provides the ATO with additional funding to:

    • actively promote voluntary compliance
    • deter non-compliance through greater visibility, and
    • ensure a level playing field for Australian businesses.

    The funding has been extended through to 30 June 2023.

    The current program includes funding for some new initiatives to:

    • address declining lodgment rates in the small and micro business markets
    • contemporise the GST risk modelling
    • extend the ATO’s justified trust program (ensuring large businesses pay the right amount of GST).

    In 2019–20, the GST compliance program delivered the following results:

    • Compliance and lodgment enforcement activities raised total liabilities of $1.6 billion, exceeding our planned GST commitment of $740 million by $827 million.
    • The justified trust program delivered on its revenue commitments; however, case work was on hold in the latter part of 2019–20 in line with the ATO’s broader COVID-19 response.
    • GST debt recovery activities raised $216.2 million against an annual commitment of $238.4 million. The GST debt collected, and associated coverage activities were reduced in the second half of 2019–20 due to deliberate actions taken by the ATO to support business through the bushfires and COVID-19.

    All strategies funded by the program have been impacted by COVID-19. This meant fewer activities in the latter part of the financial year, although in line with past years, overall revenue commitments were exceeded.

    Contemporising GST Risk Modelling Project

    As a result of an Inspector General of Taxation (IGT) review into GST refunds (March 2018), the IGT recommended the ATO develop a formal framework of continuous improvement for its risk assessment tools.

    The project is a key component of the GST compliance program, aiming to:

    • make it easier for businesses to comply by streamlining, automating and integrating indirect tax obligations with natural business systems
    • increase assurance processes for business that will foster willing participation and increase community confidence with the GST system.

    The project has now progressed into the delivery phase, following completion of a high-level design and risk model business requirement improvements.

    A reporting framework monitors risk model performance and develops our research for future data needs.

    We anticipate models for GST high risk refunds to be fully operational by mid-2023.

      Last modified: 30 Aug 2021QC 64820