The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today announced terms of reference for two reviews into the Australian Taxation Office’s (ATO) approach to debt collection and services and support for tax practitioners.

ATO approach to debt collection

Uncollected tax continues to grow and reached $17.7 billion in 2012–13 with over 60% owed by small businesses. The ATO has stated that more recent increases are a result of economic conditions and its assistance to viable businesses to stay afloat. “Despite the ATO’s debt assistance programs, its approach to collecting taxes has been a persistent source of taxpayer complaint,” Mr Noroozi said. “Government relies on the ATO to collect revenue efficiently whilst considering the impact on taxpayers, particularly small businesses,” he said. Some stakeholders believe that the ATO has recently taken a firmer approach to debt collection despite continuing economic pressures whilst others are of the view that the ATO allows debts to accumulate for too long before taking action. Other aspects of the ATO’s debt management, including its use of third party debt collectors, have also been questioned.

ATO services and support for tax practitioners

In 2012–13, over 70% of individual taxpayers and 90% of business taxpayers used registered tax practitioners to assist them with their tax affairs. “Tax practitioners play a vital role in the tax system and it is, therefore, important that the ATO–tax practitioner relationship remains positive and cooperative,” Mr Noroozi said. Challenges in maintaining ATO services for tax practitioners have strained the relationship, with the level of tax practitioner satisfaction falling from 72% in 2007 to 62% in 2012 (with a low of 51% in 2011). “Despite more recent attempts to improve the ATO’s tax practitioner services, concerns persist regarding their adequacy, reliability and functionality,” he said. This review will investigate ATO services, such as the Tax Agent Portal, relationship managers, lodgment program and tax practitioner’s risk differentiation framework, to identify improvements for the ATO, tax practitioners and taxpayers. “The concerns raised will be investigated in these two reviews. The aim is for balanced thinking to identify improvements for taxpayers, tax practitioners and the ATO,” said Mr Noroozi.

Terms of reference and submission guidelines for both reviews are available on the IGT website: www.igt.gov.au. Submissions will be treated as confidential and are due by 18 July 2014.

SYDNEY

26 May 2014

Media contact: Ali Noroozi – (02) 8239 2111