We are constantly working to minimise the GST gap and maximise voluntary compliance by addressing and influencing taxpayer behaviour. A range of taxpayer actions can affect the GST gap, including:
- non-reporting of GST
- under-reporting of GST
- over-claiming of refunds
- non-payment of GST liabilities.
These behaviours range in severity from honest reporting errors to deliberate non-compliance.
Our compliance programs usually have a balance of prevention, early engagement and assurance activities. They are targeted to higher risk taxpayers and industries.
We improved our risk models using better data and more advanced analytical techniques to detect suspect GST refunds. We also introduced streamlined treatments for fraudulent refund lodgements involving transaction fraud or identity crime.
We adopted a letter strategy advising property developers of unreported sales and providing them the opportunity to self-correct without penalty. Where they do not respond, we move to firmer action. This strategy requires minimal contact between us and the client.
To ensure large businesses pay the right amount of GST and to reduce the gap, we have a combination of one-to-one and one-to-many approaches. These include our justified trust assurance programs and advice and guidance strategies. An example is the publication of guidance for GST apportionment in retail banking which has driven behavioural change across the industry.
Where a business activity statement (BAS) lodged online contains an identifiable reporting error, we generate nudge messaging recommending clients check their BAS before they lodge their refund.
We address small business tax performance. A portion of the gap is attributed to these clients incorrectly reporting GST. Intelligence from our client engagements activities indicates that inadvertent errors are the main cause of mistakes. We address this with a range of preventative, educational and influencing activities. We tailor these activities to meet client needs and assist those struggling with the complexity of their reporting requirements. These include online learning and educational services for the small business life cycle, including:
- growing a business and registering for GST
- lodging BAS and record keeping
- claiming correct GST credits
We prevent compliance issues before they arise by supporting those who want to do the right thing and helping them reduce mistakes through reminders, nudges, improved information on ato.gov.au and public advice and guidance.
We take a firmer approach with those we detect deliberately evading their GST and other tax obligations.
We embed our GST work programs across all taxes, to deliver more effective and efficient risk management and enhance the taxpayer experience.
We will continue to work towards closing the gap by:
- building trust and confidence within the community by implementing strategies under the GST Compliance Program
- achieving GST compliance outcomes from other ATO government funded programs including the Shadow Economy, Serious Financial Crime and Phoenix Taskforces.