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  • We are an active and capable regulator

    While we have long maintained a focus on individual taxpayers, recent developments in data and technology, along with insights gathered from our tax gap work, are highlighting areas requiring extra attention.

    To address these, we have increased our investment in the individual taxpayer segment. We continue to build the capability of our staff and systems to improve the way taxpayers and their agents experience the tax system.

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    ATO staff

    The ATO workforce that is focused on individuals is more informed and enabled than it has ever been.

    We continue to build on a highly capable workforce of over 1,000 staff dedicated to assisting and assuring the tax compliance of individuals and their tax agents. These experts are allocated to roles ranging from help and education, through to audit, prosecutions and debt management for this segment.

    We are developing the skills of staff working with new technology and digital systems. For example, we are providing them with access to the client view of myTax to help individuals complete their returns over the phone or via web chat. We are also working to improve our internal systems to give staff better visibility of a taxpayer’s history of ATO interactions. This will enable us to provide a more responsive and holistic service to taxpayers and tax agents.

    Technology and data

    Given the number of individuals in the tax system, our success depends on our ability to use data in sophisticated ways and provide taxpayers with digital services that make it easy for them to comply and hard not to. We do this by simplifying and automating our processes wherever possible, and by pre-filling information about income and tax offset entitlements to prevent errors upfront.

    Preparing a tax return has evolved from a paper and post activity to the use of electronic lodgment channels and the introduction of pre-filled data. Our ability to receive, match and pre-fill large volumes of data from third-party providers, particularly in respect to income, allows us to share the information we hold about an individual’s tax affairs with them or their agent, before they lodge. This results in a better experience for our clients and facilitates self-regulation.

    We are working with data providers to extend our data sources, expand the range of information available via our pre-filling services and obtain data more quickly following the end of the income year. This will mean we can provide a more complete pre-filling service sooner for individuals.

    For example, in Tax Time 2018, we offered around 62,000 people with simple tax affairs who prepared their tax themselves, with the option of an automated or ‘push’ assessment. People who chose to participate were not required to complete a tax return. We simply issued an assessment notice along with their refund. This initiative proved to be positive for participants. In future, this offering aims to streamline the lodgment process for individuals with straightforward affairs, making it easier for people to meet their tax obligations on time.

    The more sophisticated use of data is also transforming the way we assess work-related expenses. For example, our 'nearest neighbour' model allows us to risk-assess all taxpayers that make a work-related expense claim. The model compares a taxpayer’s claims with those of their peers (earning similar income, in similar jobs) to determine how far they differ from the norm. It also allows us to build prompts into lodgment channels like myTax to alert taxpayers where we see unusually high claims, prompting them to double check their deductions.

    We will continue to expand our use of data and technology to streamline processes, keep pace with community expectations and ensure integrity in the income tax system.

    Design and consultation

    We are committed to consultation and co-design as a means of improving the administration of Australia’s tax and superannuation systems. Our products, processes and systems are created and refined in collaboration with experts, designers and users to ensure they are useful, usable and desirable.

    Our consultation framework includes tax practitioner and individuals stewardship groups, as well as special purpose working groups, topic and industry-specific collaborations and ATO Community online engagement sites.

    The ATO also provides insights to government and the Treasury about potential opportunities for statutory law reform to improve the design of the tax system. We do this when the law is difficult for both taxpayers and ourselves to apply, which can increase compliance costs. In addition, we suggest where the law can be strengthened to allow us to more effectively deal with compliance risks.

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    Influencing community attitudes

    There are many factors that influence a taxpayer’s attitude towards the tax system. But in our experience, people are more likely to comply when they trust that the system is fair and have confidence that others are complying too. For this reason, we balance our efforts across all segments of the population to make sure everyone, and every business, pays the right amount of tax.

    To be transparent about our work, the Commissioner of Taxation regularly reports to the government and the community on our performance in the ATO’s annual report. We also work collegiately with a range of independent scrutineers and appear regularly at parliamentary hearings to answer questions in relation to our decisions and performance.

    We contribute to public debate where appropriate via the media, and host and participate in online discussion forums. The Commissioner, along with other representatives of the ATO, other government agencies and the tax profession, speak publicly at events and gatherings throughout the year. We share information about our approaches and what we see occurring in the tax and superannuation systems.

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    Last modified: 11 Nov 2019QC 56222