• Taxpayer responsibilities

    SNAPSHOT:
    Participating in the system

    During 2010-11 we released our research into the effectiveness of taxpayer participation in the system. We based our research on the OECD's 'Pillars of compliance' principles. These pillars are: registration, lodgment, reporting and payment.

    Initial findings suggest a relatively high overall level of participation and compliance and that the level of participation has remained relatively stable over time.

    The indicators we have developed so far are only the first step in monitoring the level of participation by the community. We will continue to publish results from these indicators and any additional indicators we develop in the future.

    Visit our site to see our paper, Four pillars of compliance: Participation in the system indicators.

    Registrations

    During 2010-11 we processed 1.4 million taxpayer registration forms, an increase of 23,795 (1.7%) on 2009-10.

    The proportion of applications for individual tax file numbers from permanent migrants, and non-residents with working visas, continued to grow steadily, forming 53.5% of all new registrations.

    To deliver a more convenient service we also started a pilot enabling people to apply for tax file numbers at some Australia Post outlets in New South Wales and Victoria.

    The number of updates to taxpayer records increased from 20.7 million in 2007-08 to 28.7 million in 2010-11.

    TABLE 4.15: Registrations processed, 2009-10 to 2010-11

    Registrations processed

    2009-10
    No.

    2010-11
    No.

    Change
    %

    Business tax file numbers

    291,946

    286,073

    -2.0

    Individual tax file numbers

    634,788

    657,433

    +3.6

    Goods and services tax

    313,208

    312,559

    -0.2

    PAYG withholding

    140,662

    149,845

    +6.5

    Other (including registrations for luxury car tax, wine equalisation tax, fuel tax credit)

    34,155

    32,644

    -4.4

    TOTAL

    1,414,759

    1,438,554

    +1.7

    Lodgment

    There were 15.6 million income tax returns lodged in 2010-11, an increase of 633,642 (4.2%) on 2009-10. However, activity statements lodged decreased by 509,755 (2.9%).

    In 2010-11, 72.4% of individuals lodged their individual returns through a tax agent.

    TABLE 4.16: Returns and statements lodged, 2009-10 to 2010-11

    Returns and statements lodged

    2009-10
    No.

    2010-11
    No.

    Change
    %

    Income tax returns

    14,975,647

    15,609,289

    +4.2

    Activity statements

    17,720,638

    17,210,883

    -2.9

    TOTAL

    32,696,285

    32,820,172

    +0.4

    Electronic lodgments

    Overall 92% of individuals lodged their income tax returns electronically, either directly or through a tax agent.

    Some 2.5 million taxpayers lodged their income tax return using e-tax, an increase of 4.6% over the previous year. Of these, approximately 72% used the pre-filling service for their 2009-10 tax returns.

    In 2010-11 64% of activity statements were lodged electronically. Our online strategy seeks to encourage electronic lodgment and use of standard business reporting capabilities.

    Paper lodgments

    In 2010-11 lodgments of paper income tax returns for individuals totalled 1.1 million - 60,000 less than in 2009-10. Paper lodgments represent only 8.3% of the total for individuals.

    Further shifts from paper to electronic lodgment can potentially improve the efficiency of business and is a focus area in the ATO Online 2015 (IT forward plan).

    SNAPSHOT:
    Tax time

    There is a legislative requirement for individuals to lodge an income tax return with us between 1 July and 31 October each year, except where extensions have been granted. Known as 'tax time', this is one of our busiest periods of the year, even though the tax agent lodgment program allows tax agents to spread their lodgments over a longer period.

    During Tax Time 2010, we received 9.9 million tax returns and issued 7.3 million refunds valued at $19.2 billion.

    Tax Time 2010 was the first peak processing period using our new income tax return processing system. While there were some delays with the processing of returns in July 2010, overall the system performed reasonably well, given that it was the first year of its use.

    Key performance indicator

    Progress new administrative solutions to support taxation and superannuation administration

    In the past three years we have delivered new administrative solutions, including the implementation of our change program. Our new integrated core processing system was implemented in time for the delivery of Tax Time 2010.

    Reporting, processing and accounts

    In 2010-11 we managed 26.7 million accounts. We processed around 42.3 million forms and products - an increase of 7% on 39.6 million in 2009-10.

    TABLE 4.17: Forms and products processed, 2009-10 to 2010-11

    Forms and products processed

    2009-10
    No.

    2010-11
    No.

    Change
    %

    Activity statements

    17,899,365

    18,044,055

    +1

    Income tax returns

    15,252,006

    17,070,404

    +12

    Fringe benefits tax returns

    68,395

    82,224

    +20

    Superannuation forms

    843,532 (a)

    748,405 (b)

    -11

    Higher Education Loan Accounts

    1,137,820

    1,212,192

    +7

    PAYG variations

    56,434

    58,818

    +4

    Excise returns

    15,395

    17,858

    16

    Tax file number declarations

    4,381,636

    5,038,295

    +15

    TOTAL

    39,654,583

    42,272,251

    +7

    (a) On behalf of about 21 million individual superannuation accounts

    (b) On behalf of about 20 million individual superannuation accounts

    Refunds and payments

    There was an increase of over 600,000 payments processed in the 2010-11 year. This included BPAY , Billpay, direct debit, direct credit, mail and credit card payments.

    TABLE 4.18: Payments processed, 2009-10 to 2010-11

    Payments processed

    2009-10
    No.

    2010-11
    No.

    Change
    %

    Electronic payments

    17,188,262

    17,934,886

    +4

    Manual payments

    2,141,558

    1,913,930

    +11

    TOTAL

    19,329,820

    19,848,816

    -3

    In 2010-11 we issued approximately 14.3 million refunds, a 6% increase on 2009-10. The number of income tax refunds issued increased by 805,567 and activity statement refunds decreased by 6,088 in 2010-11. The increase in refunds mainly includes amendments relating to the Anstis decision and in the finalisation of pre-30 June 2010 backlogs associated with the implementation of our new integrated core processing system.

    TABLE 4.19: Refunds issued, 2009-10 to 2010-11

    Refunds issued

    2009-10
    No.

    2010-11
    No.

    Change
    %

    Income tax

    11,048,267

    11,853,834

    +7.3

    Activity statements

    2,228,780

    2,222,692

    -0.3

    Superannuation

    178,719

    172,195

    -3.7

    Fringe benefits tax

    25,936

    25,775

    -0.6

    Other (including excise and Higher Education Loan Program)

    5,746

    5,785

    +0.7

    TOTAL

    13,487,448

    14,280,281

    +5.9

    In 2010-11 as a result of the cautious approach in ramping up processing, the impacts of bedding in a new system including building familiarity with the system, and the resourcing required to handle increases in call volumes and complaints, there were delays in the issuing of some income tax refunds. The scale and complexity of the implementation of our new system meant that much of this delay was unavoidable.

    Urgent processing of refunds is available for taxpayers and businesses experiencing serious financial hardship. This year was the first full financial year where applications for urgent processing due to hardship could be made online. There were approximately 4,300 requests for urgent processing due to hardship in 2010-11.

    The amount of interest we paid on early and overpayment of tax increased from $382.2 million in 2009-10 to $578.2 million in 2010-11. This figure does not include delayed refund interest. There are a number of reasons why this increase occurred, including a significantly higher value of credit amendments as a result of litigation outcomes as well as some delays experienced in processing during July 2010.

    TABLE 4.20: Penalties and interest imposed, remitted and collected (a) by the ATO, 2009-10 to 2010-11

    Penalties and interest (a)

    2009-10
    $m

    2010-11
    $m

    Change
    %

    Penalties (b)

    Imposed

    1,444

    1,221

    -15

    Remitted

    439

    544

    +24

    Collected

    440

    270

    -39

    Interest (c)

    Imposed

    2,639

    3,331

    +26

    Remitted

    1,681

    1,889

    +12

    Collected

    2,202

    2,935

    +33

    (a) Remitted and collected amounts include penalties/interest imposed in prior years. The collection amount is an estimate based on sampling.
    (b) Incorrect return penalty, tax shortfall penalty, and failure to lodge on time penalty account for the majority of penalties imposed, remitted and collected.
    (c) General interest charge accounts for the bulk of interest imposed, remitted and collected.

      Last modified: 31 Oct 2011QC 28036