Pages 3 to 8, attachment A of the ATO’s response, contain the ATO’s response to the IGT’s recommendations.

These responses have been moved into the body of the report to remove duplication.

Australian Government - Australian Taxation Office crest


Mr Ali Noroozi
Inspector-General of Taxation
GPO Box 551

Dear Ali,

Review into improving the self-assessment system

Thank you for the opportunity to comment on your report on the Review into improving the self-assessment system.

Australia's self-assessment system relies on the willing participation and voluntary compliance of taxpayers with their tax obligations.

Your report recognises the link between high levels of tax compliance and administrative assistance that is appropriately targeted to the needs of users. I welcome your acknowledgement of the wide range of material that the ATO publishes in furtherance of this objective. We also welcome the feedback of stakeholders and note that a number of your recommendations are aimed at assisting us in improving the quality and useability of our support products.

Our response to your recommendations is attached at Annexure 1.

17 of the 33 recommendations are matters of policy or relate to areas within the responsibility of the Treasury. 2 recommendations include both policy and administrative matters - we agree with the administrative aspects of both of these recommendations. Of the remaining 14 recommendations, we agree either fully, in principle or in part with 13 and disagree with 1.

We believe that within the context of the self-assessment system, the current advice and guidance framework strikes the right balance between appropriate levels of guidance for all taxpayers and appropriately graduated levels of protection. It follows that we do not agree with your recommendation 2.7 that Tax Pack be reinstated and given Public Ruling status. We believe that the new Individual Tax Return Instructions, which were developed following extensive consultation meet the needs of individual taxpayers who lodge paper returns and feedback to date supports this view. We will continue to monitor that feedback and will undertake a review at the end of the lodgment season.

We have agreed with the majority of the remaining recommendations for administrative change. These will assist us to continue to enhance our levels of transparency and consultation in providing additional advice, support and greater certainty to taxpayers. advisers and the community. We note that this extends beyond our technical views. It also encompasses, for example, communication about the operation of our risk differentiation framework (RDF), formalising regular consultations about the information we collect in tax returns and publishing more information about our penalty decisions.

Finally, I would like to acknowledge the efforts of all involved in the undertaking of this review.

If you require further information on this matter, please contact Annette Chooi, Assistant Deputy Commissioner.

Yours sincerely,


Bruce Quigley
Second Commissioner Compliance

21 August 2012