The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today commenced a review into the Australian Taxation Office's (ATO) management of tax disputes involving large businesses and high wealth individuals (HWIs).
On 2 June 2014, the Minister for Finance and Acting Assistant Treasurer, Senator the Hon Mathias Cormann, referred an Inquiry into Tax Disputes (the Inquiry) to the House of Representatives Standing Committee on Tax and Revenue (the Committee). The Committee stated that it would examine the issues in the Inquiry through a number of themes which consist of every taxpayer market segment and the related legal and governance frameworks. The IGT has been asked to review the large business and HWI themes.
"I am pleased to commence this review at the request of the Parliamentary Tax and Revenue Committee as part of its broader Inquiry into Tax Disputes," said Mr Noroozi.
The ATO's statistics indicate that there is a much higher level of disputation within the large business and HWI market segments than all other market segments. Moreover, disputes within the large business and HWI market segments often involve significant amounts of revenue. For example, in 2012–13, totals of $997m and $247m in revenue were varied in settlements with large businesses and HWIs respectively.
"In earlier reviews, I have recommended early and effective engagement with taxpayers, the use of a variety of dispute resolution techniques and an appropriately-timed independent review function to prevent or minimise the incidence of long-running costly disputes which can also lead to a breaking down of working relationships with longer-term consequences," said Mr Noroozi.
Having regard to the high levels of disputation within the large business and HWI market segments, the potential for significant impacts on revenue and the ATO's improvement initiatives following earlier IGT reviews, the IGT considers that the Committee's Inquiry is timely and appropriate.
"I invite stakeholders to make submissions to my review. In addition to your views on potential improvements, I am also seeking examples of ATO approaches which have yielded positive outcomes," he added.
Submissions are strictly confidential and not made available to any other person, including the ATO, and generally cannot be disclosed as a result of a court order. Submissions should also address the terms of reference and submission guidelines available on the IGT website. Submissions are due by 18 July 2014.
19 June 2014
Media contact: Ali Noroozi - (02) 8239 2111