Client-to-agent linking
(Links to strategic priority 2 – Safeguard the security of the tax and super systems)
The Australian Taxation Office (ATO) has commenced consultation for client-to-agent linking for individuals and sole traders as part of the ATO’s broader program of work to strengthen the security of our systems and protect taxpayer data.
A diverse group of tax professional participants will be engaged. Individuals and sole traders, industry sector groups, professional associations and digital service providers will also be invited to provide their input and feedback as the consultation proceeds. The consultation process will inform design development, change management (including support requirements), and delivery options.
The ATO highlighted that it is limited to using existing systems to support this change, and consultation will be focussed on options that utilise systems currently available.
Member comments
Members highlighted the need for ongoing consultation with Individuals to provide simple and practical solutions for accessible pathways for non-technical and vulnerable people.
Digital service providers industry insights
(Links to strategic priority 2 – Safeguard the security of the tax and super systems)
Digital service providers (DSPs) led a discussion on key insights across the industry, which covered cloud-based software and artificial intelligence (AI) solutions to improve client services.
DSPs shared the increasing prevalence of cloud-based software, increasing their flexibility of product data and scalability of new products compared to traditional on-premises infrastructure.
DSPs provided insights into the rise and benefits of AI across the industry and the impact it is having on the market. They noted that AI is expediting new product development, that is data recognition in the cloud to harvest relevant information. DSPs said that is forcing companies to embrace AI as a tool or risk falling behind.
Member comments
Members raised concerns around the security risks and questioned the control measures around third-party AI tools to pull client records to source data points. DSPs reassured members that they use a secure closed model, and clients must opt in.
Counter fraud program – Project 2
(Links to strategic priority 2 – Safeguard the security of the tax and super systems)
The counter fraud program was established in response to government’s announcement in the 2024–25 Budget providing $187 million to the ATO over 4 years from 1 July 2024. This program aims to strengthen the ATO’s ability to prevent, detect, monitor and respond to identity crime enabled fraud attacks. These new, challenging, and innovative attacks require a strong focus on ensuring the ATO’s multi-layered fraud controls remain responsive and effective.
A key component of the program is enabling taxpayers to have better visibility and control of their own data. In particular, the ability to confirm in real time through a secure, trusted channel, activity undertaken on their account, is a control most taxpayers now expect. The ATO will be using the ATO app to deliver these new secure features, initially due to be released in mid-2025.
The ATO recognises the important relationship that taxpayers have with the tax profession and digital services. The program is engaging with taxpayers, tax practitioners and digital service providers to develop and mature the outputs of the program.
Member comments
Feedback was given on features of the ATO app which aim to uphold the client and agent relationship and protect taxpayer data.
It was highlighted that this an excellent initiative and members expressed their interest to support the program and protect their clients against the increasing amount of fraud accounts.
Digital improvements framework
(Links to strategic priority 1 – Protect the high levels of engagement and integrity in the tax, super and registry systems)
The ATO provided an overview of the digital improvements framework (DIF), which aims to progress transparency and rigour to the selection and progression of unfunded improvements to digital services for tax practitioners.
The ATO shared the focus areas of these improvements and sought feedback from members on the prioritisation of these works. The ATO expressed interest in receiving member insights to help influence the priority of the summitted works.
Member comments
Members expressed significant gratitude towards this initiative to improve digital services and noted that the work is funded out of business-as-usual budget and therefore limited in scale.
Members requested further discussion around the prioritisation of improvements and progress status as each piece of work develops.
Modernisation of tax administration systems
(Links to strategic priority 4– Increase trust and confidence in the tax, super and registry systems)
On 18 December 2024, as part of the 2024–25 Mid-Year Fiscal and Economic Outlook, the government announced it will provide the ATO $76 million to support the modernisation of tax administration systems (MTAS).
MTAS seeks to modernise income tax reporting systems to reduce compliance costs on an ongoing basis for trustees, beneficiaries and tax agents. This aims to make lodgment easier and enable most trust tax returns to be lodged electronically.
The planned deliverables under the MTAS will be deployed as part of Tax Time 2026 and Tax Time 2027. The ATO will consult with DSPs and impacted community stakeholders during the development and implementation.
As part of the announcement, government signalled an intention to amend the law to require trustees to report the tax file numbers of beneficiaries on the trust income tax return’s statement of distribution when they have an entitlement. This will replace the need for trustees to separately notify the ATO of beneficiary tax file numbers. This amendment will commence on the first day of the next quarter after Royal Assent. This measure is not yet law.
Member comments
Members highlighted the significant amount of work programmed for DSPs over the next year and that changes within MTAS will need to be staggered for industry to be able to support the ATO implement these changes.
Environmental scan
(Links to strategic priority 4 – Increase trust and confidence in the tax, super and registry systems)
External Co-Chair Michael Wright led the facilitated group discussion on insights, trends, developments and direction that the ATO should be aware of as context for the operation of the system overall, these included:
- objections on ATO website
- general interest charge remission opportunities within Online services for agents
- status reports of returns
- fraud within myGov.
Other business
The following tabled papers were noted:
- taxable payments reporting systems
- practice mail review
- upgrades to the ATO’s card payment platform
- activity statement remediation 2025
- DSP strategic working group October 2024 update
- login process for online services.