Check against delivery
Thank you, Chair.
It is always a privilege to be before the Committee with my Executive team. Since our last appearance before the (former) Committee, we have welcomed Mark Sawade, who was appointed as the ATO’s Chief Information Officer in March.
Since we were here before you earlier in the year, the ATO has refreshed our purpose and vision.
As the country’s principal revenue collection agency our purpose is clear – to collect tax so that government can deliver services for the Australian community. Our vision is an Australia where every taxpayer meets their obligations because complying is easy, help is tailored, and deliberate non-compliance has consequences.
As we deliver on our purpose and vision, we acknowledge the importance of being fair, transparent, and responsive.
As a large, government agency with extensive powers, the ATO understands that that includes being genuinely open to scrutiny.
Our organisation is made up of a large, dedicated workforce, who are committed to ensuring all taxpayers pay the correct amount of tax required by the law, regardless of their size or profile. And where people avoid or choose not to do this, we will move quickly to rectify it.
Last week we issued the legislature's 11th Corporate tax transparency report which shows that Australia’s largest taxpayers continue to pay significant levels of tax, with large corporates responsible for around $95.7 billion in income tax in 2023–24 out of a total of around $140 billion corporate tax for the year.
To give this some more context, 4,110 large corporates (or strictly speaking 2,974) account for nearly 70% of total corporate tax for the year. With 1.3 million companies covering the remaining 30%.
The high levels of compliance in this group of taxpayers’ is further demonstrated in our gap estimate for large companies, with our latest gap data for this group showing a reduction to 3.7%, down from 6.2% ten years previously (2013–14).
The government’s additional funding for the Tax Avoidance Taskforce has allowed us to continue our focus on risk, assurance, and compliance strategies across multinationals, large businesses, private groups, and wealthy Australians.
When we look at taxpayers of all sizes – most taxpayers do the right thing and pay in full and on time – in fact, just under 90% of taxes are paid on time without intervention from us. In the last financial year our net tax collections were over $636 billion, which is an increase of 3% over the Budget estimates.
However, at the same time, there is now over $54 billion of unpaid tax that is classified as collectible and could be benefiting the community. And on multiple occasions I’ve made it clear that we need to do more to recover this debt.
This debt is not disputed, most of it has been self-reported, and a significant portion is made up of amounts that have been withheld from employees’ wages or collected from consumers as GST – but not passed on to government.
We continue to direct our firmer efforts towards unpaid superannuation guarantee charge, PAYG withholding, GST and those taxpayers that are deliberately not engaging with us on payment.
But as we become increasingly firmer on recovering revenue and bringing down the collectable debt book, we must balance our responsibility to consider the circumstances and tailor our approach for taxpayers experiencing vulnerability.
We need to carefully differentiate those who are experiencing vulnerability from those who are deliberately non-compliant, which is why we have developed a Vulnerability Framework (PDF, 243KB)This link will download a file.
While the framework cannot change existing tax obligations – that is, the law does not allow us to remove obligations or to waive debts – we need to listen, act with empathy, and then connect people with the right support.
This ongoing consultation with the community will further shape how we design and deliver services.
Finally, I wanted to share with you some advancements we have made that help taxpayers to protect themselves from identity theft.
This tax time we implemented real time messages through our ATO app that notify taxpayers when key changes are made to their account, such as a change to their bank account details, and provides the ability to quickly and easily lock their account if the changes look suspicious. Over 1.3 million taxpayers have enabled the function to protect themselves. And we anticipate this will increase.
I thank you for your time and we look forward to assisting the committee this evening.