The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today publicly released the report of his review into the Australian Taxation Office's (ATO) services and support for tax practitioners. The report also focuses, more broadly, on the ATO's relationship with the 55,000 registered tax agents and business activity statement agents (together referred to as tax practitioners).
"Tax practitioners play a vital role in maintaining the health of the tax system, through assisting 70 per cent of individual and 90 per cent of business taxpayers to comply with their obligations," said Mr Noroozi. "Their practical experience and knowledge are also invaluable in the development of operational or policy initiatives," he said.
The ATO also considers tax practitioners as a key partner within the tax system and provides a range of services including priority telephone lines, extended lodgment timeframes and the ATO Portals, gateways through which a range of ATO services can be accessed. Tax Practitioners consider the Portals as key tools of trade but they are increasingly becoming a major cause of frustration and dissatisfaction due to their instability and unreliability.
"The ATO has acknowledged the problems with the ATO Portals and is working toward a long-term solution by migrating to a new, more functional and flexible platform."
Tax practitioners are also wary of the potential issues which may attend such large-scale technological changes, drawing from prior experience when the ATO introduced its enterprise-wide case management and processing system as part of the 'Change Program'.
"Whilst there are likely to be issues with any large-scale systems upgrade, as a safeguard, the ATO intends to maintain and operate both the old and new systems in parallel during the transition phase," Mr Noroozi said.
The migration to the new system is expected to be completed within the next two years. During this time, the ATO's work on the current system will be limited to maintenance and stability assurance.
"Tax practitioner dissatisfaction with the current system is likely to persist in the short term given the ATO's limited planned enhancements to the current system," Mr Noroozi said.
Communication and engagement were also identified as key areas of concern for tax practitioners, with many feeling that the ATO's written communications were inappropriate, inaccurate or ineffective. In response to these concerns, the IGT has recommended a number of improvements including that the ATO user-test all standardised correspondence in future.
The shortcomings of ATO communication with tax practitioners were particularly evident in its rollout of the new Lodgment Program which included a requirement that tax practitioners lodged 85% of their clients' returns on time.
"The rollout of the ATO's Lodgment Program, including the '85% rule', raised significant concerns and created an impression that the ATO did not appreciate the challenges faced by tax practitioners or their practices, however, it has since acknowledged the concerns and clarified its communications," said Mr Noroozi.
At a broader level, tax practitioners considered that the ATO's rationalisation of its consultation forums has diminished their opportunities to engage with the ATO on technical and other issues. The issue has also been raised in the context of other IGT reviews.
"I have recommended a number of improvements to the ATO's consultation arrangements with tax practitioners. If concerns persist, however, my office may undertake a broader review into ATO consultation arrangements," Mr Noroozi said.
In all, the IGT has made 8 recommendations to which the ATO has fully or partially agreed.
"I believe that the appropriate implementation of my recommendations will lead to improvements in the relationship between tax practitioners and the ATO which will, in turn, have positive impacts on the tax system," Mr Noroozi said.
20 July 2015
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