The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today announced terms of reference for his review into the Taxpayers' Charter and taxpayer protections.
Current international developments show a trend toward a formalised statement of taxpayer protections or rights which may be in legislative or administrative form. They are designed to strike a fair balance between the wide ranging powers of revenue authorities and taxpayer rights.
In Australia, the primary publication which sets out taxpayers' rights and obligations is the Australian Taxation Office's (ATO) Taxpayers' Charter. Whilst the charter refers to "rights" and "obligations", they are more accurately described as a set of mutual expectations. Stakeholders have raised concerns that the charter is insufficient in protecting the rights of taxpayers and that ATO officers do not always adhere to its principles. However, it should be noted that in recent years, the ATO has consciously undertaken improvements to increase its engagement with taxpayers and has taken a more proactive approach to resolving disputes.
"This review is timely in light of recent international developments, which are moving towards greater recognition of taxpayer protections, and will examine existing rights as well as alternatives," said Mr Noroozi.
Stakeholders have raised specific concerns with the adequacy of current compensation schemes in providing redress for loss or damages resulting from inappropriate ATO actions. These include a lack of transparency and independence in the way the schemes are administered. There are also particular concerns with the ATO's adherence to the model litigant rules.
"The adequacy of the ATO's administration of compensation schemes to provide redress to taxpayers and its adherence to the Commonwealth's Model Litigant Rules will also be examined with the aim of identifying improvements," said Mr Noroozi.
An emerging issue for revenue agencies and taxpayers alike is the protection of taxpayers' rights in cross-border information exchanges between revenue authorities, particularly in light of recent measures to address Base Erosion and Profit Shifting (BEPS).
"We will also address taxpayers' rights in the context of cross-border information exchanges," he added.
Terms of reference and submission guidelines for the review are available on the IGT website: www.igt.gov.au. Submissions will be treated as confidential and are due by 18 December 2015.
"We are looking for a balanced approach to the protection of taxpayers' rights which should not hinder the responsible collection of revenue but rather foster greater trust and voluntary compliance," said Mr Noroozi.
2 November 2015
Media contact: (02) 8239 2111