Last week, the Australian government responded to the House of Representatives' Standing Committee on Tax and Revenue report, External Scrutiny of the Australian Taxation Office, agreeing with its five recommendations.
Tony Greco, from the Institute of Public Accountants, told Accountants Daily that there was nothing unexpected in the recommendations, and that the recommendations were a positive step towards keeping the ATO in check.
“The ATO itself doesn’t have a board of directors or a body that oversees how it ministers the tax system, so you need these scrutineers to keep the ATO in check,” he said.
“At the end of the day, they wield so much power that Parliament needs to ensure that the checks and balances are in place.”
“I think the ATO accepted that they should be subjected to some scrutiny. I think they were questioning the volume of it, but I think they've accepted the outcome and they've moved on.”
Recommendations from the committee included increasing transparency of communication between the Auditor-General, Commonwealth Ombudsman, and Inspector-General of Taxation, and improved the explanation in their reports of why reviews were conducted and how each review fitted in with past and other current reviews.
The committee also recommended that the Inspector-General of Taxation consider conducting reviews based on complaints and emerging issues in tax administration, and work with the ATO to develop a mutually efficient system for such reviews.
Mr Greco said that this recommendation was welcome.
“Something that most people said was good was given that the inspector general now looks after complaints, that some of the reviews should come from what's coming through the complaints, and most of us would agree with that,” he said.
A final recommendation is that the committee of the next Parliament should consider expanding its biannual inquiries into the ATO to include scrutiny of the Inspector-General of Taxation, or to conduct a separate dedicated regular inquiry into the annual report of the Inspector-General.
Mr Greco said this recommendation was one that they wouldn’t have seen coming.
“The spotlight was originally on the ATO but it’s sort of shifted to some of the scrutineers themselves, so that was probably a little bit unexpected,” he said.
“The scrutineers themselves are about to be scrutinised, so that is probably something that none of them signed up for, but I think there's merit in doing that as well.”