A1.1 On 31 March 2004, the Inspector-General of Taxation announced the terms of reference for his review into the Tax Office’s administration of GST refunds. These were as follows.

'This review will investigate the Tax Office administration of GST refunds arising from the lodgment of Business Activity Statements. It will evaluate the balance between the competing priorities of protecting the revenue from mistaken or fraudulent refund claims and the necessity of maintaining cash flows for businesses and other entities by expeditiously issuing refunds. It will focus particularly upon the following matters:

  • identifying and considering the adequacy and effectiveness of Tax Office policies and procedures relating to the manner in which the Tax Office processes GST refunds resulting from the lodgment of credit BASs;
  • the current time frames and performance standards for issuing such refunds;
  • the effectiveness of policies and procedures to ensure those refunds are not inappropriately offset against other tax debts; and
  • the effectiveness of policies and procedures ensuring taxpayers are informed of delays in the processing of their refunds or of their allocation to another tax debt.'