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  • 4. GST administrative risk

    As a world-leading tax administrator, the ATO has well-established systems of oversight and management, including:

    • governance across day-to-day operations
    • integration of risk with strategy, planning and performance.

    The monitoring of performance outcomes under the Performance Agreement is incorporated into ATO operations.

    The collection of GST revenue includes optimising voluntary compliance, by effectively and efficiently managing the administrative and compliance risks to the GST system.

    GST administrative risk is the impact of uncertainty on our ability to meet the objectives of:

    • Best practice – achieve world’s best practice for GST administration.
    • Digital transformation – deliver digital transformation that improves the administration of the GST system.
    • Transparency – deliver cost effective and transparent GST administration.
    • Cooperative relationships – establish and maintain cooperative relationships between the parties.

    Best practice

    Schedule A of the Performance Agreement provides a range of agreed measures in the following categories:

    • Maintain compliance
    • Client engagement outcomes
    • Cost-effective administration

    Each category has both ‘core’ and ‘supplementary’ indicators. Core performance indicators are our key accountability measures. Taken together, they enable the ATO to demonstrate it has achieved best practice.

    Achieving best practice in the eyes of the community can be reflected in levels of trust and community confidence. We conduct regular research to measure the levels of confidence in the ATO held by the general community, as well as clients who have recently interacted with us. In 2020–21, 83% of those surveyed felt that the ATO is effectively managing the tax system, compared to 69% in 2019–20. In addition, 70% believed the ATO to be efficient in its use of money and resources to fulfil its role for the Australian Government, compared to 62% in 2019–20.

    The ATO continually looks for better practices by comparing ourselves with other organisations (public and private) with complex client bases. We continually introduce innovative ways to support and serve clients, and shore up the integrity of the ATO and tax system.

    The ATO continues to advance consistency in the administration of consumption tax internationally. We support the Organisation for Economic Co-operation and Development (OECD) in its forums dealing with the collection of VAT/GST on cross-border supplies of digital products and services and low value imported goods. In 2020–21, 2 ATO representatives also assisted the OECD in developing a regional VAT/GST digital toolkit.

    Digital transformation

    The ATO has a strong record of digital innovation and delivery and harnessing new digital opportunities. The emergence of new analytical tools, increased digitalisation and availability of data offer significant opportunities to enhance tax administration and reduce the burden on business.

    Our focus and commitment to growing our data and analytics capability is reflected as one of our 8 strategic initiatives from the ATO 2020–21 corporate plan: ‘Unlock our data potential’. This builds on the work completed by the ATO over recent years to become an organisation that is more integrated, streamlined, and data-driven. The strategic initiative is focused on improving the way we collect, manage, share and use data, to build confidence and drive actions that maximise value for the ATO and the community. Data facilitates a better understanding of our clients and provides an appropriate level of transparency to improve their interactions with us. Examples include:

    Contemporising GST Risk Model project

    This initiative continues to modernise and improve our capability to manage GST compliance risks, with contemporary risk models that:

    • target highest risk taxpayers
    • take advantage of the rapid development and sophistication in analytic techniques
    • accommodate new and ‘big’ data sets
    • keep pace with the changing risk environment and counter increasingly sophisticated and continually changing threats from fraud attempts.

    Online services for business

    An ATO-wide innovation in 2020–21 that improved online services for clients was the replacement of the ATO Business Portal with Online services for business. Online services for business is a secure and modern channel designed to operate seamlessly across a range of electronic devices, making it easier for clients to manage and access their obligations.

    Its additional features allow businesses to:

    • transact for all ABNs in a single login
    • schedule and manage a payment plan online
    • view communication history with the ATO
    • obtain copies of income tax returns.

    Transparency

    The ATO is transparent in its accountability to states and territories through regular updates at GPAS and GSTAS, and incorporating the following 4 schedules into this report:

    • Schedule A – reports against the performance outcome measures specified in the Performance Agreement
    • Schedule B – reports on the GST program deliverables that form the GST administration budget and provides the GST administration cost statement, which is a special-purpose financial report
    • Schedule C – provides monitoring and review arrangements
    • Schedule D – reports against the performance outcome measures for the ‘MYEFO 2018 Measure: Additional Funding – GST Compliance Program’. This measure was previously known as the GST compliance program ‘Working together to improve voluntary compliance’.

    Cooperative relationships

    The ATO has maintained and further enhanced cooperative relationships with key internal and external stakeholders, in particular:

    • the states and territories
    • Treasury
    • the Department of Home Affairs.

    We partnered with Treasury in 2020–21 to develop a closer working relationship with the states and territories, primarily through the GPAS. This has enabled the ATO to consult more effectively with the states and territories, inform them of risks and issues, and co-design initiatives to achieve better outcomes.

    The ATO also worked with the GST Stewardship Group, using members' GST knowledge and experience to:

    • gain insight into the issues faced by taxpayers
    • help the ATO to improve the GST system's future operation
    • communicate key ATO messages to the broader community.

    With other stakeholders in the community, we liaised with Property Exchange Australia (PEXA) to reduce duplication by incorporating the GST property settlement reporting obligations within the business systems of conveyancers.

      Last modified: 07 Feb 2022QC 67817