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  • ATO action to reduce the gap

    We understand that the tax compliance of large corporate groups influences the confidence other taxpayers have in the fairness and integrity of the tax system. Addressing the large corporate groups income tax gap therefore also improves willing participation by other taxpayers.

    By actively managing the key compliance risks that drive the tax gap, we seek to sustainably reduce that gap. We know the best way to achieve a sustained reduction in the gap is to support high levels of voluntary compliance, and this underpins all our strategies.

    The most significant compliance risks and how we are treating them are discussed in Tax and Corporate Australia. A key strategy is to provide targeted advice and guidance to the market, including safe harbours and self-assessment risk frameworks. This assists taxpayers to voluntarily comply and reduces our compliance costs.

    Our capacity and capability have been bolstered with additional funding for the Tax Avoidance Taskforce. This funding has allowed us to expand our justified trust program to the largest 1,000 public and multinational groups. This is giving us greater insight into the compliance risks in the large corporate groups population. It allows us to provide assurance over a significant portion of the tax they pay.

    We provide advice to government, via the Department of the Treasury, about potential opportunities for statutory law reform to improve the tax system. We do this when the law is difficult to apply, for both taxpayers and ourselves, and where clarification can help to decrease compliance costs. We also suggest where the law can be strengthened to allow us to more effectively deal with compliance risks.

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      Last modified: 19 Oct 2020QC 57641