To effectively administer the tax and superannuation systems, the ATO is required in accordance with the law to collect and analyse information concerning the financial affairs of taxpayers and other participants in the Australian economy.
In addition to our administrator responsibilities, the Public Service Act 1999 (PS Act) requires each agency head to ensure their agency complies with legislative and whole-of-government requirements. Agency heads are required to ensure proper use and management of public resources as per the Public Governance, Performance and Accountability Act 2013 (PGPA Act).
We consider and undertake a range of alternatives to data matching to ensure entities are complying with their tax and superannuation obligations. Relying only on data that we already hold is of limited value for the following reasons:
- The tax system operates on willing participation so our data is derived from taxpayers that are correctly registered and meeting their lodgment obligations.
- The only other way of ensuring that taxpayers are reporting their obligations correctly would be to contact every taxpayer directly.
Data matching allows us to cross-reference suitable external data to identify taxpayers who are not fully complying with their obligations, as well as those that may be operating outside the tax and superannuation systems. It also reduces the likelihood of unnecessarily contacting taxpayers who are complying with their tax obligations.
Data matching is an effective method of examining records of thousands of taxpayers to ensure compliance with lodgment and reporting obligations that would otherwise be a resource-intensive exercise.
Data matching also assists us in effectively promoting voluntary compliance by notifying the public of areas and activities under scrutiny.
Data matching allows us to provide tailored messages in our online services. Online messaging enables us to provide better service by prompting taxpayers to check they are correctly meeting their reporting obligations.
Quality assurance is integrated into our processes and computer systems and applied throughout the data-matching cycle.
These assurance processes include:
- registering the intention to undertake a data-matching program on an internal register
- risk assessment and approval from the data steward and relevant senior executive service (SES) officers prior to any data-matching program being undertaken
- conducting program pilots or obtaining sample data to ensure the data-matching program will achieve its objectives prior to full datasets being obtained
- notifying the OAIC of our intention to undertake the data-matching program and seek permission to vary from the data-matching guidelines (where applicable)
- restricting access to the data to approved users, and using access management logs to record details of who has accessed the data
- quality assurance processes embedded into compliance activities, including
- review of risk assessments, taxpayer profiles and case plans by senior officers prior to client contact
- ongoing reviews of cases by subject matter technical experts at key points during the life cycle of a case
- regular independent panel reviews of samples of case work to ensure our case work is accurate and consistent.
These processes ensure data is collected and used in accordance with our data-management policies and principles and complies with the OAIC's data-matching guidelines.
There are some incidental costs to us in the conduct of data-matching programs, but these will be more than offset by the total revenue protected. These costs include:
- data analyst resources to identify potential instances of non-compliance
- compliance resources to manage casework and educational activities
- governance resources to ensure compliance with the guidelines and Privacy Act, and quality assurance processes to ensure the rigour of the work undertaken by analysts and compliance staff
- storage of the data.
The use of data is increasingly common across government agencies and the private sector. The use of data, computer power and storage continues to grow, which increases the benefits from data matching. Data matching and the insights it provides help us:
- deliver tailored products and services, which underpins our culture of service
- make it easier for taxpayers and agents by providing tailored messages in our online services
- enable early intervention activities, as our goal is prevention rather than correction
- maintain community confidence in our ability to administer the tax and superannuation systems, because we can
- make better, faster and holistically smarter decisions with measurable results to deliver a level playing field for all
- solve problems and shape what we do for the community
- advise government and deliver outcomes with agility
- maintain the integrity of the tax and superannuation systems by
- providing education to assist taxpayers trying to do the right thing
- deterring behaviours so taxpayers adhere to their obligations
- detecting taxpayers who are not complying with their obligations, in particular targeting those that continue to deliberately abuse the tax and superannuation systems
- enabling enforcement activity and recovery of tax revenue
- directing compliance activities to assure that wider risks to revenue do not exist.