Treasury
Treasury provided an update on the recent Economic Reform RoundtableExternal Link. Submissions from professional associations were appreciated and clearly informed the discussion.
The Treasurer publicly endorsed 3 agreed principles as objectives for the tax system:
- Achieving a fair go for the working population, including addressing intergenerational inequity.
- Investment incentives, supporting capital deepening and through that, productivity and economic growth.
- Simplification, making the tax system simpler and more sustainable so we can fund the services people need.
Productivity improvements
On 4 July 2025, 30 regulators and 8 portfolio departments were asked for new ideas to improve regulation and reduce unnecessary compliance burdens. The responses have been published Regulatory reform to reduce red tape and ease burden on businessesExternal Link.
Some initiatives that were outlined in the Commissioner of Taxation’s response to simplify tax administration and boost productivity were discussed:
- Better use of existing data - making it easier for individuals in business to comply by pre-filling tax returns with high confidence data matches from taxable payments reporting system.
- e-Invoicing adoption - to reduce reliance on manual processes via email and pdf attachments for invoices and support faster processing and better record-keeping. The government is moving to establishing eInvoicing for government as the default method for exchanging invoice information in government procurement for most Australian Government entities.
- Monthly GST reporting for small businesses. A pilot program to support businesses to get back and stay on track, spending less time in reconciling their accounts for tax purposes. This will better align reporting and payment frequency to their existing business processes and rhythms, improving compliance and promoting greater cash flow visibility.
- Embedding Australian Taxation Office (ATO) approved simplified instalment calculation in accounting software, this will help businesses better align instalments to final tax outcomes. The pilot has shown some success.
- Modernising ATO assurance programs and reporting obligations for large businesses. This will look at how we can streamline our assurance programs to provide tailored experience for large business.
- Measuring compliance costs - develop a framework to better understand drivers of and identify opportunities to reduce existing compliance burden by market segment. This will also help inform future policy submissions.
Cost of compliance
The ATO is developing a cost of compliance methodology to measure where the compliance burden sits across different segments and taxpayers and where there is a mismatch between the cost imposed and the benefit it provides. Both taxpayer and tax agent perspectives are being considered.
To help build and test the framework, members are encouraged to provide examples, especially where costs are seen as inflated or unnecessary.
Better targeted superannuation concessions
The ATO is preparing as much as possible ahead of legislation being passed. A working group has been established and further consultation with that group will be undertaken in future. It is expected the administration will be like Division 293 with taxpayers able to elect to pay out of their super balance or pay separately. Members expressed the need for regulations as well as legislation.
Changes to small business litigation funding
The small business litigation funding program will be closed. The ATO noted there has been a decline in the number of small business cases funded since the criteria was tightened. The test case funding program will be expanded to include precedential small business matters where systemic issues have been raised.
Members were asked to advise if there is anything that needs to be considered in light of this decision.
Note, the ATO still has a small business independent review option, but there has been low take-up in the past. Alternative dispute resolution mechanisms are available, and many cases are resolved before reaching a tribunal hearing due to clarification of facts.
Applications for test case funding are reviewed by a panel including retired judges and other senior professionals and assessed against the funding criteria. The Panel’s advice is considered by the ATO decision maker.
Taxpayer relief provisions
The ATO is seeking feedback on taxpayer relief provisions and its approach to remission of interest and failure to lodge penalties, lodgment and payment deferrals, and payment plans. Ideally, a future system will guide people to the right support rather than them having to know what to apply for upfront.
The following core principles are being developed:
- fairness
- conditionality
- context
- engagement
- exclusions.
Members suggested transparency should be considered as a principle to ensure consistent application and public accountability.
Members were asked to consider if the principles are clear and comprehensive or if anything is missing. Members should also consider the impacts on different practices or markets and what information is needed to help people navigate the system more easily.
Debts on hold
Letters have been sent to approximately 20,000 people with debts totalling around $480 million, advising that their debts on hold (greater than $100) have been made visible on ATO systems. Debts of less than $100 are being made visible but letters are not being sent. Taxpayers will be notified in online services.
Any accrued interest is being remitted and this remission is being extended for a further 6 months. After that, the concession will need to be applied for, or interest will accrue.
Redesign of the voluntary tax transparency code
The voluntary tax transparency code (VTTC) has been redesigned, by the Board of Taxation to reduce compliance burden and duplication, aligning more closely with international reporting standards and separating reporting requirements for clarity.
The final version of the updated VTTC is expected to be published by the end of October 2025. Implementation will begin on 1 July 2026, with early adoption options available.
Attendees
|
Organisation |
Member |
|---|---|
|
ATO |
Kirsten Fish (Co-chair), Law Design and Practice |
|
ATO |
Jeremy Hirschhorn, Client Engagement Group |
|
Chartered Accountants Australia and New Zealand |
Michael Barbour |
|
Chartered Accountants Australia and New Zealand |
Susan Franks |
|
Corporate Tax Association |
Simon Staples |
|
CPA Australia |
Alexis Kokkinos |
|
CPA Australia |
Jenny Wong |
|
Institute of Public Accountants |
Tony Greco |
|
Law Council of Australia |
Mia Clarebrough |
|
Law Council of Australia |
Neil Brydges |
|
The Tax Institute |
Jerome Tse (Co-chair) |
|
The Tax Institute |
Julie Abdalla |
|
Treasury |
Diane Brown |
|
Treasury |
Laura Berger-Thomson |
Guest attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Alex Affleck, Office of the Chief Tax Counsel |
|
ATO |
Anita Challen, Frontline Risk and Strategy |
|
ATO |
Ben Kelly, Superannuation and Employer Obligations |
|
ATO |
Cassandra Franklin, Office of the Chief Tax Counsel |
|
ATO |
David Allen, ATO Executive |
|
ATO |
Emma Rosenzweig, Superannuation and Employer Obligations |
|
ATO |
Hoa Wood, ATO Executive |
|
ATO |
Jonathan Todd, Private Wealth |
|
ATO |
Nadia Alfonsi, ATO Executive |
|
ATO |
Paul Beohm, Policy, Analysis & Legislation |
|
ATO |
Rebecca Bodel, Frontline Risk and Strategy |
|
ATO |
Rob Heferen, Commissioner of Taxation |
|
ATO |
Sonia Corsini, Frontline Risk and Strategy |
|
Board of Taxation |
Jennifer Lloyd |
|
Board of Taxation |
Paul Korganow |