The TPRS regime has been extended to a number of new industries in recent times, with the cleaning and courier industries coming into line since 1 July 2018 and the road freight, security, investigation, surveillance and information technology industries set to report from 1 July 2019.
The TPRS is a transparency measure that was first applied to the building and construction industry, recouping an extra $2.3 billion in its first year of operation in 2012.
In its submission to Treasury, CA ANZ tax leader Michael Croker said the Tax Office should look to provide a voluntary disclosure campaign with each new iteration of TPRS, in the vein of the ATO’s Project DO IT.
“Whilst we do not condone tax evasion, TPRS provides a ‘clean slate’ opportunity for those who wish to come forward and disclose tax underpaid in prior years,” said Mr Croker.
“The standard ATO approach should apply, although the commissioner may feel it appropriate to further remit penalties and interest for a limited period.
“CA ANZ has always found it curious that Project DO IT provided generous disclosure incentives to (typically) high wealth individuals who failed to disclose offshore income and assets, but has yet to extend a similar opportunity to ‘ordinary’ Australians who have failed to comply with domestic tax obligations.”
Further, noting the vast number of businesses set to be impacted by the further extension of TPRS to the road freight, security, investigation, surveillance and information technology industries, Mr Croker believes the ATO needs to practice patience in the implementation phase.
Further guidance will also be required for tax advisers to help them better understand different scenarios applicable to different industries.
“This means that the ATO will need to invest heavily in a range of communication and education strategies to ensure maximum take-up of TPRS,” said Mr Croker.
“As has occurred with previous implementation projects, a degree of patience and tolerance for initial taxpayer failings will be required from the tax regulator.
“Tax advisers such as our members also need time to assist clients with implementation. This assistance often covers issues beyond TPRS, and extends to much broader, important topics such as business systems modernisation.”