6. ATO update

  • Discussion of current operating environment, and key and emerging issues including:
    • Indirect Tax Compliance Program

Compliance program 2012-13

Peter Harding provided an overview of the ATO’s risk and compliance program pointing out that the ATO supports, and is driven by, voluntary compliance.

Of the 257,000 clients claiming fuel tax credits each year, 59% are in the large market – with 23% in the Small and Medium Enterprise (SME) market and 16% in the micro market. Claimants split across broad industry groups are:

  • mining (35%)
  • transport and storage (15%)
  • agriculture, forestry and fishing (11%) and
  • construction (8%).

The ATO continues to monitor diesel production and checks fuel tax credit claims. Peter explained that modelling on a ‘proxy’ estimate of diesel production is used and is then compared with claims. Forecasts are then based on ATO and Treasury’s modelling.

A key change this year was around large claimant assurance program, with the ATO holding twenty risk workshops as part of the 2012-13 ATO assurance processes. Roll out of the risk workshops to date has resulted in a higher level of assurance around fuel tax credit claims lodged by the selected top 100 claimants.

The compliance program, this year called Compliance in focus, will be a briefer document than in past years with a focus on the large market to gain confidence that systems and methodologies are correct, and that companies are receiving their rightful entitlements. A hard copy will not be printed, details will be available on ato.gov.au.

Peter advised members that the compliance focus areas for 2013-14 will include:

  • treating and dealing with rate changes flowing from changes in the road user charge (RUC), and changes from clean energy measures
  • review of selected claims impacted by the Linfox case
  • fuel tax credit risk workshops – focussing on the large claimants of fuel tax credits which will ultimately provide a higher level of assurance of around 50% of total annual fuel tax credit outlays
  • SME clients in the construction industry - focus areas (multiple issues; half rate to full rate claim; road user charge and clean energy impact of the carbon charge)
  • follow-up on market research findings on fuel tax credit areas which will probably lead to further marketing and communication activities
  • continuing support for clients impacted by the clean energy and other rate changes
  • commitments under the refund integrity project commenced in 2011-12 continue to target low level fraud and non-complying tax agents
  • ongoing risk profiling to identify higher risk clients for review / audit, and
  • implementation and checking of activities by oil recyclers following the Cooper Brothers Holdings Pty Ltd vs. Commissioner of Taxation decision in the Administrative Appeals Tribunal (AAT).
    Last modified: 19 Feb 2014QC 38789