16 Dec ATO annual report
The Commissioner of Taxation has released the 2016-17 annual report, detailing the Australian Taxation Office (ATO) performance results. The report highlights the ATO’s accomplishments, but also acknowledges that trust and confidence needs to be restored in the ATO’s services, performance and integrity, which were tested by serious system outages in December and February resulting in related service interruptions, and the revelations of Operation Elbrus which highlighted ATO staff in breach of the agency’s code of conduct.
The Commissioner highlighted some of the ATO’s more successful results during 2016–17 including:
– The Tax Avoidance Taskforce which raised $4 billion of additional liabilities against a handful of large businesses and multinationals. The ATO also engaged with companies potentially within the scope of the Multinational Anti-Avoidance Law, with a number of them restructuring to recognise profits in Australia for the first time.
– The ATO’s early engagement and alternative dispute resolution has resulted in a 61% reduction in the number of appeals to the Administrative Appeals Tribunal since 2013–14. The ATO also introduced Dispute Assist and Fast Intensive Triage initiatives to streamline and support the resolution of objections, which resulted in faster resolution of disputes.
– The ATO’s litigation results showed success in more than 80% of cases, highlighting that the ATO are selecting the right cases to pursue through the courts. The Full Federal Court’s decision on the pricing of related-party debt and subsequent assessments in the Chevron case has yielded revenue in excess of $1 billion, and is considered one of the most important decisions in corporate tax in Australia and will have a direct impact across a range of sectors.
– The ATO implemented automated SMS reminders rather than formal letters for habitual late payers, which reaped an additional $800 million in payments in 2016–17 at a cost of just $0.09 per SMS compared with $1 for a formal letter. This method of communication focuses on prevention, and is proving much cheaper than chasing these payments after they are due with phone calls and more letters.
The ATO intends to continue reforming administration of the tax and super systems under the reinvention program, and remains committed to improving the client experience and reinforcing a service culture in the ATO. The ATO will continue working with clients, and intends to direct particular efforts into the following areas:
- earlier engagement, greater transparency and cooperation with clients and partners
- prevention and early warning, rather than correction
- more sophisticated use of data for both service and compliance purposes
- increased digital service offerings and streamlined interactions
- greater appreciation of, and empathy for, taxpayers; and
- sensible risk management.