• Active compliance

    The aim of active compliance activities is to deter, detect and deal with non-compliance and ensure taxpayers who comply with their obligations are not at a personal or commercial disadvantage relative to those who choose not to comply.

    In 2010-11, we undertook over 7.9 million active compliance activities, raising $9.0 billion in tax liabilities and $2.3 billion in penalties and interest liabilities. We collected $6.8 billion, some of which related to liabilities raised in prior years.

    Some of the more complex issues are seen in the large business market, particularly for income tax matters. Amended assessments raised on completion of large business audits are frequently disputed. When these disputes are resolved in the taxpayer's favour, we issue credit amendments to give effect to that outcome.

    Large business market credit amendments made during 2010-11 reduced current and previous years liabilities by approximately $3.4 billion. This amount is higher than in previous years due in particular to the resolution of court cases with two large corporate groups which resulted in approximately $2 billion in credit amendments for prior year cases.

    FIGURE 4.7: Active compliance liabilities and collections, 2008-09 to 2010-11

    FIGURE 4.7: Active compliance liabilities and collections, 2008-09 to 2010-11

    NOTES
    Collections are a combination of actual collections and estimates of collections based on sampling.

    Collections on income tax liabilities raised in 2010-11 may have been received in previous financial years as payments can be made before an activity is finalised. These payments are included in our overall revenue collections in the year they are received but they are only included as active compliance results once the activity is finalised and the liabilities raised.

    Collections also include collections on tax, penalties and interest raised in prior years.

    Liabilities are the net value of debit and credit amendments from active compliance intervention on returns, statements and claims. The impact is a combination of tax, penalties and interest and transfer payments and covers excise, goods and services tax, income tax and superannuation products.

    Results also include our activities to prevent incorrect refunds or payments being issued.

    Over this period, liabilities have been higher than cash collections as a proportion of liabilities raised. This is because large audit results in dispute take time to resolve through court processes.

    Our active compliance results include $764 million of liabilities raised due to compliance-related voluntary disclosures. This amount includes $292 million of voluntary disclosures for large market goods and services tax and income tax matters and $32 million raised as a result of the offshore voluntary disclosure initiative.

    Our active compliance results for 2010-11 include outcomes from system generated lodgment demand letters which were not reported as results in previous years. This high volume function has led to our active compliance interactions increasing to 7,972,504 activities.

    Cash collections include cash paid on disputed amended assessments raised.

    The liabilities and collections figures in this chart have been adjusted to reflect prior year corrections identified and made. These corrections relate solely to active compliance results. These corrections do not impact the Budget or our financial statements. The 2009-10 year corrections appear in Appendix 17.

    Key performance indicator

    Reduce non-compliant behaviours through deterring, detecting and dealing with taxpayers not willing to comply

    2008-09

    2009-10

    2010-11

    We undertook 2,688,696 active compliance activities, raising $6,728 million in tax liabilities and $1,580 million in penalties and interest liabilities. We collected $5,363 million, some of which related to liabilities raised in prior years

    We undertook 3,153,664 active compliance activities, raising $7,155 million in tax liabilities and $2,047 million in penalties and interest liabilities. We collected $5,234 million, some of which related to liabilities raised in prior years

    We undertook 7,972,504 active compliance activities, raising $9,011 million in tax liabilities and $2,315 million in penalties and interest liabilities. We collected $6,839 million, some of which related to liabilities raised in prior years

      Last modified: 31 Oct 2011QC 28036