Outcome 1: Improved administration of tax laws for the benefit of all taxpayers
The role of the Inspector-General of Taxation is to improve the administration of the tax laws for the benefit of all taxpayers. This is to be achieved by reviewing both the systems established by the Tax Office to administer the tax laws and the systems established by tax laws in relation to administrative matters. The Inspector-General’s two outputs derive from the statutory functions. These outputs involve the identification of systemic issues for inclusion in the work program and the provision of independent advice to government on the administration of the tax laws. The scope of the work program is determined by the Inspector-General. However, the Inspector-General of Taxation Act 2003 also provides that the Minister may direct that a matter be included on the work program, and that the Inspector-General considers requests to conduct reviews from:
- the Minister (separate from the direction provision);
- the Commissioner of Taxation;
- a resolution of either House, or both Houses, of the Parliament; or
- a resolution of a committee of either House, or both Houses, of the Parliament.
Broad-based community involvement in the identification of issues and the opportunity for all stakeholders to provide submissions ensure that reviews undertaken are relevant and timely for all stakeholders. In view of this, the Inspector-General requires the flexibility to vary review priorities so as to allow emerging and important systemic issues to be addressed in a manner that is timely and relevant to government. The Commissioner of Taxation has statutory independence in his administration of the tax laws. The Inspector-General does not hold any powers to direct the Commissioner of Taxation in the administration of the tax laws. The effectiveness with which the Inspector-General’s advice to government contributes to the achievement of the outcome may be difficult to assess. In some instances, the provision of advice to government may lead to legislative change to address an identified systemic issue. However, on other occasions the Commissioner of Taxation may independently address a systemic issue identified by the Inspector-General either following the release of a review report by the Minister or the publication of an issues paper or work program by the Inspector-General.
Output 1.1.1: Identification of issues for review and prioritisation of work program
The Inspector-General is required to establish his own work program. He must take into account any directions from the government to undertake a particular review. The Inspector-General must also consult with the Commonwealth Auditor-General and the Commonwealth Ombudsman to avoid overlap of work. The Inspector-General has chosen to consult widely with business, accounting, legal and tax organisations in setting his work program. As well, he has published a framework for review selection — refer Issues Paper Number 2 Policy Framework for Review Selection.
The performance information of Output 1.1.1 is as follows:
- broad-based community involvement in the identification of systemic issues in the administration of tax laws; and
- reviews undertaken are relevant and timely for the government and other stakeholders.
Key priorities in 2003-04
The Inspector-General of Taxation identified the following key priorities for Outcome 1.1.1:
- to undertake a scoping review to identify the systemic issues in the administration of the tax laws concerning the community;
- to develop a work program based on consultation with key business, accounting, legal and tax organisations;
- to develop strong links with both public sector stakeholders and private sector stakeholders; and
- to commence a number of reviews with the intention of reporting to the government as soon as possible on those reviews.
Key outcomes in 2003-04
Since his appointment in August 2003, the Inspector-General has undertaken the following activities:
- a scoping review to identify some 60 systemic issues in the administration of the tax laws concerning the community;
- publishing five issues papers outlining the context for the scoping review, the policy framework for review selection and three other papers dealing with the 60 systemic issues identified;
- wide-ranging consultation throughout Australia to assist both in the development of a work program and the conduct of the first three reviews initiated by the Inspector-General. A schedule of private sector organisations with which we have regular contact is at Table 3. A significant number of other organisations have also been consulted.
- establishment of the terms of reference and the consultation plan for the following reviews:
- a review into remission of General Interest Charge for groups of taxpayers in dispute with the Tax Office;
- a review into the tax administration of GST refunds arising from the lodgement of Business Activity Statements; and
- a review into the Tax Office’s small business debt collection practices.
- speakers have been provided for key business, tax, accounting and legal conferences, and other opportunities have been taken to meet with taxpayers and their advisers. This has enabled the Inspector-General to share information on the direction of the work program and to obtain input on the issues to be considered in the three reviews initiated during the 2003-04 year. A list of key speaking engagements is at Table 2; and
- consultation with peak private sector organisations to consider the ongoing work program of the Inspector-General for the 2004-05 year. As a result of this consultation, it is planned that proposed reviews will be undertaken around the theme of Tax Office audit/verification activities.
|Date||Organisation||Type of function||Location|
|15 September 2003||PricewaterhouseCoopers||Lunch Meeting||Sydney|
|15 September 2003||Government Backbench Revenue Members||Meeting||Canberra|
|18 September 2003||Small Business Coalition||Meeting||Canberra|
|19 September 2003||Electricity Supply Association of Australia||Tax Managers Network||Sydney|
|2 October 2003||Business Coalition for Tax Reform||Meeting||Sydney|
|15 October 2003||State Chamber of Commerce (NSW)||Members Forum||Sydney|
|16 October 2003||Australian Institute of Administrative Law||Lunchtime Seminar||Canberra|
|20 October 2003||Australian Council for Infrastructure Development||Lunch Meeting||Sydney|
|6 November 2003||Institute of Chartered Accountants in Australia||Church Discussion Group||Sydney|
|10 November 2003||Law Council of Australia (NSW Branch)||Lunch Discussion||Sydney|
|1 December 2003*||Taxation Institute of Australia||Seminar||Brisbane|
|4 December 2003||Westminister Tax Discussion Group||Dinner Meeting||Sydney|
|9 February 2004||Law & Finance Pty Ltd||2nd Annual Summit||Sydney|
|18 February 2004*||Law Society of NSW||Committee Meeting||Sydney|
|12 March 2004||Institute of Chartered Accountants in Australia||CA Business Forum||Sanctuary Cove, Queensland|
|16 March 2004||Committee for the Economic Development of Australia||Trustee Roundtable Talk||Sydney|
|20 March 2004||CPA Australia||CPA Practitioners Conference||Sanctuary Cove, Queensland|
|23 March 2004||Associated Planners Financial Services||Breakfast Meeting||Sydney|
|25 March 2004||Hills Hawkesbury Initiative for Excellence||Seminar||Baulkham Hills, New South Wales|
|Date||Organisation||Type of function||Location|
|31 March 2004||State Chamber of Commerce (NSW)||Legal Council Forum Lunch||Sydney|
|1 April 2004||Institute of Chartered Accountants in Australia||CA Business Forum||Canberra|
|2 April 2004||Institute of Chartered Accountants in Australia||CA Business Forum||Hobart|
|2 April 2004*||Taxation Institute of Australia||National Convention||Melbourne|
|15 April 2004||The University of NSW (ATAX)||6th International Conference on Tax Administration||Coogee, New South Wales|
|1 May 2004||National Institute of Accountants||Tasmania/Victoria Congress||Cradle Mountain, Tasmania|
|3 May 2004||Institute of Chartered Accountants in Australia||CA Business Forum||Randwick, New South Wales|
|5 May 2004||Institute of Chartered Accountants in Australia||CA Business Forum||Adelaide|
|11 May 2004||Taxation Institute of Australia||Lunch and Presentation||Perth|
|12 May 2004||Institute of Chartered Accountants in Australia||CA Business Forum||Perth|
|14 May 2004||State Chamber of Commerce (NSW)||Legal Council Forum Lunch||Sydney|
|19 May 2004||KPMG||Partner and Client Lunch||Sydney|
|21 May 2004||CPA Australia||CPA Practitioners Conference||Terrigal, New South Wales|
|24 May 2004||KPMG||Partner and Client Lunch||Melbourne|
|24 May 2004||CPA Australia||CPA Corporate Tax Compliance Symposium||Melbourne|
|26 May 2004||Institute of Chartered Accountants in Australia||CA Business Forum||Melbourne|
|31 May 2004||CPA Australia||CPA Corporate Tax Compliance Symposium||Sydney|
|1 June 2004*||Institute of Chartered Accountants in Australia||Chatswood Tax Discussion Group||Chatswood, New South Wales|
|4 June 2004||CPA Australia||CPA Practitioners Conference||Lorne, Victoria|
|15 June 2004||CPA Australia||CPA Practitioners Conference||Perth|
* Presentations made by Inspector-General of Taxation staff.
|Australian Industry Group|
|Australian Business Limited|
|Australian Chamber of Commerce and Industry|
|Business Coalition for Tax Reform|
|Business Council of Australia|
|Corporate Tax Association|
|Council of Small Business Organisations of Australia Limited|
|Institute (The) of Chartered Accountants in Australia|
|Law Council of Australia|
|Law Society of NSW|
|Law Society of Western Australia|
|Law Institute of Victoria|
|National Farmers’ Federation|
|National Institute of Accountants|
|National Tax & Accountants’ Association Ltd|
|Small Business Coalition|
|State Chamber of Commerce (NSW)|
|Taxation Institute of Australia|
Output 1.1.2: Provision of independent advice to the government on the administration of the tax laws
The Inspector-General undertakes reviews into particular systemic issues in the administration of tax laws in accordance with his work program. The approach and processes associated with the conduct of the review are determined by the Inspector-General, and there are no time restraints. The report, outlining findings resulting from the review, is submitted to the Government after providing the Commissioner of Taxation with the opportunity to provide comments. However, once the Inspector-General has given his report to the Government, the Government must publish the Inspector-General’s report, either by tabling in both Houses of the Parliament or otherwise within 25 sitting days of receipt.
The performance information of Output 1.1.2 is as follows:
- reports, undertaken in accordance with required processes, are of a high standard, timely and useful to government; and
- findings and recommendations achieve improved administration.
The first report of the Inspector-General of Taxation was finalised after 30 June 2004.