GST administration annual performance report 2020–21

In this report

• Foreword
• 1. Accountability framework
• 2. GST revenue performance
• 3. GST administration expenditure
• 4. GST administrative risk
• 5. GST compliance risks
• 6. Compliance engagement
• 7. GST public advice and dispute management
• 8. Department of Home Affairs
• Performance report

Foreword

I am pleased to present the 2020–21 GST administration annual performance report on behalf of the Commissioner of Taxation.

We are committed to delivering an effective and efficient GST administration that delivers better experiences for our clients.

Overall, the GST system is operating well. The net GST gap calculated for 2019–20, is estimated to be 7.8%, resulting in the ATO receiving over 92% of the GST revenue that was expected to be collected, the bulk of which was collected voluntarily. This compares favourably with similar international tax jurisdictions.

As the economy recovered from COVID-19 in 2020–21, we raised $73.1 billion in GST cash collections. This was 4.7% (or $3.3 billion) above the revised budget estimate and 21.3% higher than in 2019–20.

Our GST cash collections included:

• $4.8 billion (net) from the Department of Home Affairs
• $1.0 billion in GST for supplies of digital products and services, and low value imported goods.
• We also raised $2.3 billion in liabilities through client engagement activities, including:
• $1.1 billion from compliance and lodgment enforcement activities as part of the GST compliance program
• $0.5 billion in compliance liabilities raised from our high-risk refund case work.

Expenditure on GST administration for 2020–21 was $538.2 million, down 6.5% from 2019–20. The decrease in costs was as a result of the ATO’s continued support of the COVID-19 stimulus measures in the first two quarters of the year.

We take a holistic approach to ensuring the health of GST, which means we use different strategies to encourage sustained voluntary compliance. While we address non-compliance through audits, audit amendments make up a small percentage of total GST collections. Fundamentally, the GST system relies on the vast majority of taxpayers engaging with the ATO as willing participants, so we are increasing our focus on assisting clients to get things right from the start.

Technology and data are increasingly driving improvements to the GST system, and the ATO leads the way as one of the most digitalised revenue authorities in the world. In the last 12 months, these key ATO digital transformation milestones have positively impacted the administration of GST:

• Establish the Australian Business Registry Services (ABRS) – a new service that will streamline how businesses interact with government and manage their registry obligations, providing one unified source of trusted business information.
• Replace the ATO Business Portal with Online services for business – making it easier for businesses of all sizes to manage their ATO obligations.
• Deliver automation and new GST risk models under the Contemporising GST Risk Models project – providing efficiencies, better strike rates and increased revenue protection.

The practical implications of using technology and data to drive voluntary compliance leads to significant improvements in tax performance. Those who are digitally engaged, particularly small businesses, are more likely to be successful in meeting their taxation obligations.

COVID-19 has continued to present challenges; the impact however has not been consistent across industry or location. Some businesses are recovering well, others are struggling, while some have experienced little change. In effect, this has created a multi-speed economy. In this environment, different businesses require different support; a uniform or one-size-fits-all response from the ATO is not appropriate, so we have used discretion based on the circumstances.

Throughout 2020–21, the ATO applied several administrative levers including:

• deferrals of payments
• quicker access to GST refunds
• options to enter low-interest payment plans for existing or future tax debts.

Our empathetic approaches were well received, providing a good foundation for relationships and compliance with clients into the future.

I would like to acknowledge our strong, cooperative working relationship with representatives from Treasury and the states and territories on the GST Administration Subcommittee and the GST Policy and Administration Subgroup, and thank them for their ongoing support and advice during the year.

You can also download this document in Portable Document Format GST administration annual performance report 2020–21 (PDF 1.6MB).This link will download a file.

Figure 1: GST snapshot as of 30 June 2021