• Reinventing the ATO

    Chris Jordan, Commissioner of Taxation
    Tax Institute of Australia 29th National Convention
    Hobart, 27 March 2014
    (Check against delivery)

    Introduction

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    The last time I spoke at your convention I was new in the role as the first ‘outsider’ Tax Commissioner. Now, one year on, with six to go in my tenure, I want to share with you my vision for the ATO, report back on progress and achievements, and talk about some of the challenges we face.

    First though, I’d like to congratulate the Tax Institute for organising this year’s convention, which once again includes a broad-ranging program for tax professionals from across the country.

    I want to acknowledge the productive partnership we have with the Institute; both formally through various groups, and informally when my colleagues or I need to get advice and share information. Thank you for your insight and help.

    Observations of the ATO

    The ATO is a large enterprise with around 24,000 staff in more than 60 locations around Australia. We collect more than $408 billion in gross tax each year and administer the superannuation system. Our annual operating budget is around $3.3 billion.

    When I became Commissioner, I was aware of the ATO’s century of service delivery and its strong performance. I was also aware of feedback that the ATO had become isolated from some segments of the community and stakeholders.

    I saw areas I could tackle immediately and you heard about those early last year. Since then, we have made changes to our consultation arrangements, set up independent reviews, and worked on having a greater voice in law design.

    To my surprise and relief, many people in the ATO were keen for change as well. There has certainly been enthusiasm and energy to work with the new leadership team – I have had a very pleasant welcome and most people are happy to look at new ways of doing things.

    Let me offer you some observations about the ATO from the past year or so. Most of these were echoed by last year’s independent Australian Public Service Commission’s Capability Review.

    The ATO is an organisation that has a strong commitment to its purpose. The people in the ATO are proud of their capacity to deliver, and enthusiastic about their work and its value to the Australian community.

    The organisation has a good track record of delivering major government programs and is a very effective crisis manager. I want the ATO to apply the thinking and practices that show up in those situations to day-to-day business. Wouldn’t that be something!

    There is a high level of retention of graduates (85 per cent over the last six years). I believe this says something about being a good employer with a good development program, career opportunities and interesting work. How do we take the lessons from that program and apply them more broadly?

    However, there are also many self-imposed cumbersome processes and policies. We need to reduce our own red tape to help free up people to make decisions.

    We have a culture of risk aversion which staff recognise and regularly report up the line. An over-emphasis on absolute integrity, combined with a fear of mistakes and love of process has produced far too many rules and checkpoints. This means some people spend their time disproportionately on things that are not that important in the overall scheme of things.

    All of this is going on while we have to manage pressures that are common to us all – achieving more with less, keeping pace with latest technology and communication advances, meeting customer service demands, needing to be green, understanding and dealing with globalisation, and changing demographics. I am sure you are aware of those dynamics and are also grappling with what they mean for you and your own futures.

    New leadership

    We are now in a phase of what we call ‘Reinventing the ATO’. A crucial part of reinvention is a new leadership team which has to be one of the most powerful signals and drivers of change.

    Our ATO Executive looks very different to those of the past. It is now made up of people who are based in different states with diverse backgrounds, skills and perspectives:

    • There are three Commissioners from outside the ATO, two from the private sector and two based in Sydney.
    • Today, I want to publicly welcome Andrew Mills as our new Second Commissioner for Law Design and Practice. Andrew started on 3 March and is here today. Of course, as a past president of this Institute and a finalist this year for your Chartered Tax Adviser of the Year award, he is no stranger to many of you. After his successful career at the tax firm Greenwoods & Freehills, I am certain Andrew’s intellect, expertise and knowledge will significantly add to the calibre of the ATO leadership team.
    • Second Commissioner Neil Olesen brings extensive experience in tax compliance, policy, law and design and now heads up the Compliance Group, taking over from Bruce Quigley who retired in December.
    • Second Commissioner Geoff Leeper has a strong background at the senior level in successful delivery of government services and payments. He takes responsibility for the People, Systems and Services Group.
    • Our head of ATO People is from another agency and has private and international experience.
    • Our head of Corporate is from the New South Wales government and is based in Sydney, and
    • The Chief Finance Officer is originally from the private sector and based in Melbourne.

    I believe we have a cohesive and talented team – ready, willing and able to reinvent the ATO.

    Later this year we will also have a new Chief Tax Counsel and a new Deputy Chief Tax Counsel on board.

    New mission and vision

    The main role of the ATO will always be to administer the tax and superannuation systems in line with the law. But as with other large organisations, we must articulate what we will do, how we’ll do it, and regularly measure our success. This is essential for our people, our stakeholders and, of course, the community who ultimately need to know we are doing the best we can.

    So, we have set longer term directions in a new mission and vision and I want to highlight some different concepts and nuances.

    Our new mission – our unique job – is:

    to contribute to the economic and social wellbeing of Australians by fostering willing participation in the tax and superannuation systems

    Let me highlight a few words that have us rethinking the way we go about our business:

    ‘…fostering willing participation’

    How would you answer this question “what is participation in a tax system or superannuation system?” and “how do you foster willing participation?”

    Just think about the difference between the concepts of participation and compliance. And then think about “what would be needed to foster or increase willing participation?”

    Think of the various taxpayers that you know of. What motivates them to do the right thing and what stops some of them from doing the right thing? How do we better support people who just need help through complexity versus those who don’t want to play ball at all?

    What does willing participation look like for uni students, working Mums and Dads, retirees or small businesses? How does it relate to wealthy people or multinational enterprises?

    Our level of willing participation is good in Australia with more than 95 per cent of the revenue we collect, coming in voluntarily; the balance as a result of active compliance. Compare that with somewhere like Italy – nearly a quarter of the net tax revenue only comes in as a result of active compliance intervention.

    The high level of willing participation in Australia is the result of a mix of factors including belief in taxes, fairness and integrity of the system and the administration, structure of systems such as PAYG and franking, and of course the deterrent effect of our active compliance actions.

    Rethinking and questioning our core business is a critical part of our transformation of the ATO. By 2020 our goal – our vision – is to be …

    a leading taxation and superannuation administration known for our contemporary service, expertise and integrity

    In essence, we believe we can realise the vision and foster willing participation if we are externally-focused, and improve the client experience – things like:

    • We should provide services just like any modern large company might offer. Why shouldn’t the ATO’s website work like the best? Why can’t we communicate in ways that people understand and respond to individual circumstances?
    • We must streamline business processes and cut red tape internally and externally.
    • We will work more cooperatively and effectively with the community and stakeholders to identify problems and tax design solutions – by putting ourselves in the shoes of others and working with them.
    • We need to be more pragmatic – making decisions that are good in the long run to ensure willing participation and the integrity of the system.
    • We will ensure a level playing field by dealing with those who do not play fair by avoiding their tax and super obligations.
    • We will take compliance action based on transparency, risk and behaviour – knowing when to use a carrot or a stick will underpin our responses to individual circumstances.
    • We will advocate more strongly for change when we see laws not working well in operation, representing the voice of the community when we see legislative change is needed.

    These things are easy to say but not so easy or quick to do. At the heart of it is cultural change. You would know that cultural change is something that does not happen overnight. The ATO is not a homogenous place so we can’t have a one size fits all approach. We have to have multiple strategies and I do not underestimate the job ahead.

    To help us achieve our mission and vision, we have set up a 2020 Program Office to support cultural change and to coordinate and align all of our activities. We are also getting external advice on how to shape our various transformational strategies.

    The Assistant Treasurer expects me to report back regularly on cultural change and we are currently conducting internal and external surveys to set benchmarks for measuring our progress.

    Achievements and reporting back

    Our vision is not empty rhetoric or pie-in-the-sky stuff, and while aimed at 2020, we have already made some of the necessary changes and signalled where we are headed. I will now share with you some of our achievements so far and report back, as promised, when I spoke to you last year.

    For individuals we have released our first app for Apple, Android and Windows devices, giving easy access to services like tracking the progress of tax returns and links to YouTube videos about tax. Within 10 days of its release ahead of Tax Time in June last year, the ATO app was ranked number 14 for the App Store’s general free apps and number one for free financial apps (competing with The Tax Institute’s “Blue Journal” app).

    We’ve also made some significant improvements in the area of superannuation. Through SuperSeeker, individuals can now view all their active accounts for the previous two years, and make online requests to claim lost superannuation. Improved account matching means 94 per cent of lost accounts and 70 per cent of unclaimed superannuation accounts are now matched to a TFN.

    The new Super Tick service validates employer and member information. Industry estimates that this will save them around $50 million each year.

    In the next couple of months we will release new Superannuation functionality for our ATO app so people can check their balances and change their personal details electronically.

    We finally introduced e-tax for Mac, with 320,000 tax returns lodged by Mac users. We also published a new digital Tax Time magazine for tablet devices to help with preparing tax returns.

    Paperless transactions grew. Last Tax Time more than two million people converted from cheque to electronic refunds straight to their bank accounts. The number of people who lodged paper returns reduced from 600,000 in 2012 to 400,000 in 2013 – a productivity boost for everyone involved.

    In December the ATO joined forces with the Department of Human Services to run a live Facebook Q&A, to help school leavers starting work or planning further study. This was a first for both departments and shows the way forward in communicating with young people.

    We launched several services to assist small businesses. Our new online product – Small Business Assist – is now available on our website as well as through our small business app. It provides easy access to information and tools that can help small businesses meet their obligations. This includes web links which help to answer questions about business tax and superannuation. For instance, if you’d like to know more about lodging your business activity statement, simply type in your question and Small Business Assist delivers a tailored response, including relevant webinars and videos.

    Small Business Assist is online 24/7 and is available in 10 languages. If you need more help, you can also book online an after-hours call back for a time and day that suits you. The after-hours call back service that we trialled is now running permanently from 6pm to 9pm, Monday to Thursday.

    For those taxpayers who have a tax debt, we are using behavioural insights in our communications with them to encourage voluntary payments. We are changing the language, structure and layout of a number of debt letters to increase payment compliance by being clearer about what the taxpayer needs to do and the consequences of not paying.

    We tested three letters in a series of pilots. We found that of taxpayers who had received the new letter, there was an increase in those making payment in part or in full or entering into a payment arrangement. There was also a decrease in those leaving their debt unpaid and those allowing their debt to increase. Another pilot group of taxpayers with ageing debt was more than six times more likely to enter into a payment arrangement than the control group, and contributed 52 per cent more to reducing their debt.

    Following the positive results from the pilot, we are now applying these writing techniques more broadly, making it easier for taxpayers to choose well and therefore comply with their obligations.

    For large businesses, we introduced new processes for resolving self-objection issues. The main difference is early discussions between the taxpayer and the tax officer responsible for making the determination. These early, face-to-face talks get to the core issues more quickly and short-circuit unproductive paper wars between the parties.

    Similar to the self-objections, we now have an early engagement model for rulings – again with people sitting down, talking and getting all the facts on the table. While we still have some finessing to do, turnaround times have reduced significantly.

    Unnecessarily long running cases and audits are being brought to a sensible close – it’ll take a while, but we will get better at recognising when we reach the point of diminishing returns. Shane Reardon, now Deputy Commissioner of Public Groups and International (the new name for what was Large Business and International), has made significant progress on closures.

    I want to explain the change of names for our business lines – Large Business and International, to Public Groups and International, Small and Medium Enterprises to Private Groups and High Wealth Individuals, and Micro Enterprises and Individuals to Small Business and Individuals Tax. These changes signal a number of things:

    • We are aligning ourselves with the structures and legal frameworks that exist in the market
    • We recognise that these different entities have different governance and reporting requirements
    • We can better tailor our approaches using these segmentations

    Recent media reports claimed that the ATO is going to allow private sector accountants to sign off on some company tax returns. While this is not exactly true, we are looking to draw on the already rigorous audit processes for listed companies.

    Indeed, our Public Groups and International area is exploring a new initiative for undertaking assurance work through the External Compliance Assurance Process project (ECAP). This aims to give some taxpayers with turnovers of between $100 million and $5 billion, the opportunity to use their company auditors to review factual matters, rather than the ATO.

    We are continuing to interact with others including the Australian Securities and Investments Commission and the Auditing and Assurance Standards Board. We will also consult a sample of key taxpayers about the design, impacts and user experience.

    If it all works, it will save everyone money and time; giving the ATO broader compliance coverage, freeing up ATO resources to chase more serious tax risks and freeing up business to focus on business. Of course we would not adopt this widely without the necessary checks and assurances.

    Recommendations on the concept are expected in late May.

    I also want to mention U-turns. We realise that the way we implement changes in our interpretation of the law can have a significant effect on our relationships with the tax industry.

    The Practice Statement we issued in 2011 dealt with U-turns, in response to recommendations by the Inspector-General of Taxation. Basically, the Practice Statement requires ATO staff not to devote compliance resources to implementing a changed view of the law retrospectively, if the ATO significantly contributed to taxpayers taking the incorrect view of the law.

    Some have suggested that last year’s Federal Court decision in the Macquarie Bank case has cast legal doubt on the ATO’s ability to give effect to the principles in the Practice Statement. In particular, the Court said that an assessment of a taxpayer’s liability must be made according to the law as the ATO understands it. The court also said that the Practice Statement should be amended to avoid any possible reading to the contrary. However, we think we have considerable practical scope to use the Practice Statement and we are committed to the principles in it.

    Deciding how to allocate the ATO’s compliance resources – that is, the time and efforts of staff – is not simply a narrow cost-benefit equation. It is not just about comparing the cost of (say) finishing an audit with the amount of revenue expected from an assessment. Rather, in making choices we take into account the broader health of the tax system, and especially the public confidence in tax administration. This is the thinking that underpins the Practice Statement.

    I have asked Second Commissioner Mills to take a special interest in this to ensure that on the infrequent occasion of a U-turn, we manage the outcomes and relationships the right way. Indeed, we want to avoid them as much as possible in the first place.

    Independent review and dispute resolution

    One of the significant achievements in the past year has been the implementation of independent reviews for income tax audits for large businesses.

    The service involves a review of the technical merits of the audit case before the ATO’s position is finalised. A senior officer from our Law Group, not the Compliance Group, conducts the review. . This officer is independent of the audit process and comes in with a 'fresh set of eyes'.

    This function managed by Debbie Hastings, First Assistant Commissioner from our Review and Dispute Resolution area, has had a successful introduction. By January this year, 10 cases were completed, with five and a half of those found consistent with the ATO’s original position and four and a half in the taxpayer’s favour.  Importantly the feedback from the taxpayers and their advisors is that this process is working even though it is within the ATO. 

    We reviewed the process after six months, with most advisers saying they will continue to use this service and recommend it to other clients in future. One taxpayer actually said that the Independent Review recommendation letter is ‘the best piece of paper to ever come out of the ATO’.

    Based on our success, I want to announce that we will expand the independent review to large businesses for GST matters.

    We are trying simple, informal approaches such as earlier, direct and open contact with taxpayers, having in-house facilitators and using third parties such as former Federal Court and High Court judges for early neutral evaluation or mediation.

    In the past two years, the number of settlements has increased by around one-third – a good indicator that our alternative dispute resolution strategies are working.

    In the 2011 financial year 31per cent of all settlements were at audit (or pre-audit) and 47 per cent were at litigation. In 2013 settlements at audit (or pre-audit) had increased to 49 per cent and 28 per cent of all settlements were at litigation. In other words we are settling a larger proportion of disputes earlier in the process – saving time, money and effort for everyone.

    Debbie Hastings will provide more detail about independent review and alternative dispute resolution in her presentation after morning tea. Before I move on, I want to acknowledge Debbie’s efforts and achievements in the past year.

    Integrated tax design

    I now want to cover another initiative I mentioned to you last March – ensuring the ATO has a more credible voice in law design.

    We established our new Integrated Tax Design (ITD) Unit headed up by former Chief Tax Counsel, Andrew England. The unit is our centre of expertise in tax design capabilities. The people there have a better understanding of the whole system of tax laws and administration. They can advise on the best ways to administer the law to both deliver on policy outcomes and make it operate effectively for the community and the ATO. The ITD Unit’s job is to work closely with Treasury and use our knowhow as the tax administrator to influence and advocate for the laws that will have the best outcomes in the short and long term.

    A good example of our advocacy role was the advice we gave last year to Treasury and the Board of Taxation about the 92 announced but unlegislated measures. We recommended that there should be protection measures for taxpayers who had anticipated and self-assessed based on the announced measures. This is a good example of advising how to administer in the best possible way for the community.

    The Unit will also ensure our requests for changes in law are prioritised and that we present a whole-of-ATO approach to our dealings with Treasury. We realise there is limited capacity for changing the law and we are also looking at other ways to resolve issues rather than creating another big backlog.

    One example is resolving the complex interpretation issues involving the interaction of taxing financial arrangements and consolidation regimes. These areas of law have created uncertainty for business, tax advisers, and the ATO. The ATO originally thought the relevant provisions ran counter to the policy intent, and suggested amendments to Treasury. However, we reviewed that position and decided that we can interpret the law consistent with the intent, so in the end, there was no need to change the law.

    Crucial to our input into law design is an understanding of how things really play out for taxpayers and their advisors. We have to be in tune with the community – knowing what problems there are and listening to possible solutions. Our consultations and relationships with key stakeholders like the tax profession are vital to us providing the right advice.

    ...Which brings me to my next important topic – consultation.

    Consultation

    In July we set up new consultation arrangements to streamline our engagement with the community, including with tax practitioners.

    Previously, we had nearly 1500 external people in 230 meetings a year across 68 ongoing committees. Then we had ATO people and the administrative support processes behind them. The obvious question was: were we, was Australia, getting value for the time and effort?

    My view was no, so we revamped our arrangements. We now have eight stewardship committees looking into the tax and superannuation systems and project-like consultation on specific issues. The focus is on gathering the right people about the right issues at the right time, for example using experts to provide the ATO with more industry-specific knowhow.

    These shifts haven’t all been easy. A lot of people – both within and outside the ATO – have found this challenging. They were used to the old pattern of meetings, relationships and usual conversations.

    The Tax Institute has been instrumental in helping us establish the new consultation processes – bringing both the good and bad to our attention, as good partners do.

    I am sure that by this July, around 12 months since the changes, everyone will be more comfortable with the new arrangements and we will get better value from them.

    The Tax Institute is involved in many major consultations, for example we consult about: fixing our website, taxation of professional practices, testing external compliance assurance processes, and the feasibility of statutory powers for the Commissioner to address defects in the law.  Your president Michael Flynn has also recently written to me to share ideas about de-regulation opportunities in the tax system. I welcome these direct approaches.

    The Tax Institute is a valued and trusted member of our stewardship forums: the National Tax Liaison Group, the Consultation Steering Group and the Tax Practitioner Advisory Group. You have a lot to offer – working with us more closely on improving the tax and superannuation experience – whether it’s about tax law design or amendment or identifying potential risks to the system.

    It also helps that I’ve known Senior Tax Counsel Robert Jeremenko for many years in various capacities. There is no doubt that dealing with people you can trust is a great starting position for meaningful consultation.

    International tax issues

    Talking about risks to the system, let me turn to the international tax arena. With the release of the Organisation for Economic Cooperation and Development’s (OECD) Action Plan on Base Erosion and Profit Shifting in 2013 and Australia’s presidency of G20 this year, we certainly have the spotlight on international tax. I have made commitments that we will do what we can to avoid double non-taxation and ensure that Australia gets its fair share of tax. Let me outline what we are doing.

    Firstly, we are working more closely with partner tax agencies to map the global operations of Multi-National Enterprises (MNEs). Just as modern corporations think globally when planning their tax affairs, tax administrations, like the ATO, need to think globally when addressing company tax risks.

    Our work with several other countries to investigate the global tax planning of MNEs in the digital economy has already resulted in an Aggregated Risk Report. The report identifies global e-commerce business structures and tax risks, as well as patterns and trends of the digital economy. It has also given us information about the specific global tax planning arrangements of a handful of companies which will be used by audit teams. I reiterate my position with these MNEs about Base Erosion and Profit Shifting (BEPS): “If you are going to use ‘on the edge’ minimisation strategies in Australia, we are going to make our presence felt – we will check everything you do and we won’t walk away”.

    This practical, multilateral cooperation is the key to addressing profit shifting and reforming the international tax architecture. I presented this approach to the Forum of Tax Administrators (FTA) Board at the OECD in January and argued it should be normal practice for tax administrations around the world to collaborate, to ensure there is global compliance analysis of global tax planning arrangements. It is essential that we build a top-down picture of these arrangements, not a single jurisdiction’s view from the baseline up. The FTA was enthusiastic about adopting this global approach, with work being done to develop systematic guidance for countries.

    This new multilateral approach has informed the OECD’s Taskforce on the Digital Economy report. With the final report of the taskforce due in April, we would like to make known how tax administrations are working at a practical level to address the e-commerce issues raised.

    While all of this work has been invaluable in testing compliance with local laws – including the new Transfer Pricing and general anti-avoidance provisions – it also provides evidence to support policy evaluation by the Treasury and the OECD. Multilateral cooperation is the future of global tax compliance.

    We are also working with colleagues internationally as part of the broader ATO international engagement strategy – bilaterally, multilaterally, and through the OECD and the Joint International Tax Shelter Information Centre.

    In our own Asia-Pacific region, we are driving improvement on the coordination and leadership of tax issues by strengthening ties through the Study Group on Asian Tax Administration and Research (SGATAR). The group’s next meeting will be hosted in Australia this November and I welcome your input on how to encourage a more united Asia-Pacific stance on tax matters.

    We are committed to working cooperatively to find solutions to the broad challenges faced by the international tax system as a result of globalisation and the increasingly digitalised economy. Central to this work is the view that tax should be paid where the economic activity occurs.

    Multilateral cooperation has put us in a good position to influence considerations at the OECD and support Australia’s G20 presidency. At last month’s G20 Finance Ministers’ meeting in Sydney, the Treasury and ATO supported the Treasurer’s commitment to the G20 agenda of international cooperation, greater transparency, information exchange, and tackling offshore tax evasion.

    To ensure the ATO is best positioned to deal with this increased focus on international tax, we recently moved our internationals area within the Public Groups and International business line, to be under the leadership of Deputy Commissioner Mark Konza. Mark’s focus on BEPS is driving collaborative approaches and increased cooperation with other tax jurisdictions.

    We have commenced a four-year compliance program on International Structuring and Profit Shifting (ISAPS), focusing on companies which have undertaken an international business restructure or have significant related party cross border arrangements. We have screened 233 such companies and have identified an initial 86 higher risk cases. If issues are identified in these reviews, audits will follow to establish whether appropriate tax is being paid in accordance with Australian laws.

    The ATO is committed to implementing the new OECD global standard for automatic exchange of information on foreign residents. This Common Reporting Standard (CRS), endorsed by the G20 Finance Ministers, will increase tax transparency and minimise compliance costs. While the ATO and Treasury are consulting with industry stakeholders on the new standard, this new era in transparency will shed light on international structures and transactions like never before. To reference the Treasurer Joe Hockey, and I quote: “This is a big achievement. The globe needs to know who’s paying tax where. This standard will significantly enhance transparency and reduce opportunities for tax evasion and avoidance”.

    Supporting the Common Reporting Standard for automatic exchange of information is Australia’s treaty network. Thanks to international cooperation, the ATO has made significant progress in collecting offshore tax revenue. Australia now has over 100 information exchange treaty partners and these treaties do bear fruit. Even countries previously thought of as 'tax havens', such as Switzerland and the Cayman Islands, are working to increase transparency. In 2012–13 our treaty partners helped Australia to collect around half a billion dollars extra in tax revenue, and penalty and interest payments. Australians benefit from bringing these assets and income back into the Australian tax system.

    As governments around the world step up their data sharing and harness powerful technology to find tax cheats, the concept of the 'tax haven' is dying. It's just a matter of time before you'll be caught.

    I would like to announce today an offshore voluntary disclosure initiative. I am urging all taxpayers with offshore assets to declare their interests, ahead of a global crackdown on international tax havens and I will issue a media release with these messages later today.

    We are calling it 'Project DO IT: disclose offshore income today', and it provides a last chance opportunity for those who haven't declared their overseas assets and income to come back into the system before December 2014.

    Under Project DO IT, taxpayers will be encouraged to re-engage with the Australian tax system by disclosing omitted income or over-claimed deductions relating to their offshore activities. Eligible taxpayers who make disclosures under Project DO IT will:

    • Only be assessed for applicable (open) periods of review (generally only the last four years)
    • Be liable for a shortfall penalty of 10 per cent (low-level disclosures will attract minimal or no penalties)
    • Be liable for full shortfall interest charges (SIC replaced GIC in relation to amended assessments after 1 July 2005)
    • Not be entitled to utilise any losses that arose in years for which they are not being assessed
    • Be able to seek assurance regarding the ATO’s tax treatment of repatriated offshore assets
    • Be able to enter into a settlement deed to obtain additional certainty (where circumstances call for additional surety), and
    • Not be investigated or referred for criminal investigation by the ATO on the basis of their disclosures.

    Now is the time for individuals with offshore income to get their affairs in order and avoid steep penalties and the risk of criminal prosecution for tax avoidance.

    The year ahead

    There is a lot happening at the ATO and in the tax system. I’m going to do what I can to make improvements to the tax and super experience by reinventing the ATO.

    We have set ourselves an ambitious agenda. Let me list a number of the things happening in the coming year and I hope next year I can report back about our achievements. They are:

    • Supporting Australia’s G20 presidency
    • Leading the Study Group on Asian Tax Administration and Research (SGATAR)
    • Implementing any National Commission of Audit findings affecting the ATO
    • Contributing to deregulation and cutting red tape – internally and externally
    • Refining consultation arrangements
    • Increasing the take up of Standard Business Reporting or SBR
    • Introducing new products and services for different client segments
    • Changing the culture at the ATO
    • Reducing the ATO’s running costs

    Last year the Second Commissioners and I released a 2013-14 statement about the kind of place we want the ATO to be. We said, among other things, that it needs to be results focused, with a sense of purpose and timeliness.

    My leadership team and I know we can do this – we can feel a shift in the organisation already.

    Let me leave you with something to think about…

    I imagine many tax practitioners are thinking about their future in an increasingly electronic environment, with the new avenues for direct contact between the ATO, taxpayers and third parties.

    As key players in the tax system we have to face these changes together. Just as we are reinventing the ATO, what are you doing – what is your vision for your future?

    Thank you

    Last modified: 06 Mar 2015QC 39692