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End of attention
This indicator is the proportion of company tax liabilities paid on time. Companies have an obligation to pay tax according to their income. Australia operates a tax system which incorporates withholding and instalment arrangements, so most taxpayers have credits withheld during the year. This helps ensure that at the end of the income year they have enough tax withheld to meet their tax liability. However when insufficient credits are withheld the ATO will raise a debt on assessment liability. Liabilities may also be raised as a result of the lodgment of an amended return or as a result of compliance activity.
This indicator was derived by determining the number and value of liabilities raised and due for payment by 30 June. Generally the payment due date for companies is based on their size or specified by the ATO lodgment program.
A liability was considered to be paid if the balance outstanding was zero once payments, credit amendments, amounts written off and any other transferred credits/refunds have been taken into account. The payments received from companies may cover more than one liability but was recorded on ATO systems as one payment. The payments or credits are allocated to each liability transaction held on the taxpayer account.
A liability was considered to be paid on time if the balance outstanding was zero within seven days of either the due date or the date the liability was raised, whichever was the later.
Only transactions which result in a liability that was payable by 30 June each year were included in the population. Also included were transactions involving liabilities which are being disputed or involved in insolvency action.
As the measure was determined at a transaction level rather than at the taxpayer level, the indicator using number of transactions may be distorted to some extent.
In measuring this indicator, the timeliness of the lodgment which created the liability was ignored.