GST Stewardship Group key messages 10 June 2020

Welcome and introduction

Deborah Jenkins opened the meeting with an acknowledgment of country, welcomed members, noted apologies and gave an overview of the scheduled agenda.

Deborah welcomed Andrew Howe, Property Council of Australia, as the new co-chair.

Changes in ATO representation

Assistant Commissioner Kath Anderson, Individuals and Intermediaries, is joining the group.

New Treasury member

Jacky Rowbotham is the new Treasury representative.

COVID-19 response – an international perspective

The ATO provided a briefing on an Organisation for Economic Co-operation and Development (OECD) report detailing how other governments have acted to limit the adverse impacts of the COVID-19 virus on their citizens and economies through tax and fiscal policy responses. There was also member input on what lessons have been learned in Australia and what we should be doing now. The briefing provided evidence that some countries had temporarily reduced their value added tax base. The OECD report did not cover the reasons.

The discussion included analysis of Australia’s economic impact compared to G7 countries and global regions; and how Australia’s response compares to other countries. Some examples of industry impacts included a boost in the performance of digital products (like gaming and streaming) and health products. An example of a drop in performance was low value imported goods.

Australia had a marked advantage in implementing stimulus measures quickly because there was already a high level of digital interaction and the ability for people to work from home.

Australia is a member of the Tax Debt Management Network and chair of the International Debt Management Committee. While other countries like Canada have given blanket payment deferrals, Australia provides deferrals upon request meaning taxpayers’ individual circumstances are considered.

There is now a broader ‘vulnerable’ class of taxpayers. They are willing to pay but cannot, through no fault of their own. The ATO is also mindful that a tax debt is only one part of the creditor environment for a taxpayer.

Members’ comments

Members congratulated the ATO on its swift implementation of the Government stimulus measures and the helpfulness of ATO staff.

There are differences in the stimulus measures offered across the OECD because laws and revenue agency administrations differ between countries. Some countries copied the Australian approaches.

Members relayed that people who had talked to them were keen that potential JobKeeper fraud be dealt with.

Members asked about the impact of COVID-19 on debt. The ATO advised that reportable debt is based on lodgments. Taxpayers who had asked for payment arrangements are now moving to lodgment and payment deferrals. This means the pattern of lodgment may be masking emerging debt levels.

Members observed that using GST turnover in the JobKeeper legislation had added some complexity. For example, the G1 label is not the same as the GST turnover comparison. For GST Groups, the way their turnover is assessed is sometimes different to their actual group structure.

Inspector-General of Taxation and Taxation Ombudsman (IGTO)

The IGTO, Karen Payne, provided an update on her role and responsibilities and information about what she is noticing about GST issues.

The presentation included a history of the IGTO and its structure, powers, scope and strategic priorities. The IGTO noted that the tax system is not just represented by the government and its administrators but included everyone who participates in and advises on tax matters.

The complaint process flow was discussed, including complaint categories, response timeframes and the types of recommendations the IGTO can make. Historically, most complaints concerned a tax debt. Currently, the most common issue is to do with refunds.

A breakdown of complaints via the IGTO complaint category type, GST topic types and ATO markets was discussed. It was noted that many complainants were self-representing and the reasons for this were being more closely examined.

IGTO staff deal with members of the community who can be angry or deeply distressed by their circumstances. IGTO staff are trained to help them with these scenarios. Surveys of IGTO complainants show that while they might not necessarily be happy with the outcome achieved by the IGTO, they are satisfied with the IGTO’s professionalism.

The IGTO can undertake broader investigations. An example of this is the current investigation into the ease with which family members can interact with deceased taxpayer accounts.

Members were provided with information on how to contact the IGTO as well as a link to a register of potential review topics on the IGTO website.

Members’ comments

Members asked about the IGTO discretion not to investigate cases that are more than 12 months old. So far, this discretion has not been applied.

Members were advised that a complaint about the application of a Director Penalty Notice could be lodged either by the company or the director themselves. It is more likely that the director themselves would do it.

Members noted that Tax Clinics experience similar volumes of self-representing taxpayers to the IGTO and are also an avenue for financially challenged taxpayers.

Agency updates

Treasury update

The Treasury provided the group with a written report about the status of key Treasury legislation since the group last met. Much of this legislation was implementing the government’s response to the economic downturn on account of COVID-19.

The Treasury also updated the group with recent government decisions:

• The Treasurer announced that the economic and fiscal update will be delayed to 23 July 2020, so the government can incorporate the outcomes of the JobKeeper review. Treasury noted members’ willingness to provide input for the review.
• The Treasurer announced that the instant asset write-off stimulus measure will be extended until 31 December 2020.
• The Assistant Treasurer announced the suspension of indexation to Pay As You Go (PAYG) income tax and GST instalments for the 2020-21 financial year in response to COVID-19.

Members’ comments

Members observed that the Assistant Treasurer’s announcement regarding the freezing of PAYG indexation for the 2020-21 financial year had been mis-reported in the media.

ATO update

The ATO also highlighted the extension of the Instant Asset Write-off until 31 December 2020.

The ATO has sent a lot of communication out to members between meetings. This is a commitment to keeping members informed more frequently, especially during the current COVID-19 environment.

The ATO is pleased with the take-up of myGovID and the transition of sole traders. The ATO continues to work with overseas entities to allow access to ATO systems via myGovID. Additional functionality is being added and New Zealand residents will soon be able to use Australian visas as identification for myGovID.

20 Years of GST – reflections

GST system – an external perspective

The group’s external members shared ideas from their recent workshop on the GST system.

20 years of GST

While recognising it is a significant milestone, the members agreed that in the current COVID-19 environment it would be more appropriate to defer activities to mark the milestone to later in the year. Members were encouraged to provide suggestions about what form this could take.

Charter and operation of the GST Stewardship Group

Endorsement of the GST Stewardship Group charter

A GST Stewardship Group Charter was introduced, highlighting the value of a consistent approach to external consultation meetings across the ATO. The group endorsed the charter.

Members’ comments

Members asked for clarity on the new ATO security classifications and on what information they could distribute to their association members.

Discussion about engagement between meetings

Members expressed an interest in holding shorter and more frequent ad-hoc special purpose meetings in between main meetings. The co-chairs would like member feedback on how future meetings could be managed, to get the best discussion and value from their time.

Meeting close

Co-chairs Deborah Jenkins and Andrew Howe thanked members for their contribution to the meeting.

Attendees

Apology