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‘Significant investigation’: ATO reforms to create fairer tax system

Australian Small Business and Family Enterprise Ombudsman Bruce Billson has become the latest to back recommendations made by the IGTO, noting they will go a long way in addressing significant tax issues plaguing the nation’s SME community.

Tax&Compliance Emma Ryan and John Buckley 18 October 2021
— 2 minute read

Last week, Inspector-General of Taxation and Tax Ombudsman (IGTO) Karen Payne handed down six recommendations on how the ATO could more effectively make taxpayers aware of their rights to complain, which have been largely agreed to by the ATO.

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Among the recommendations are for the ATO to update the Taxpayers’ Charter to include “an express right to be informed of rights to review, complain and appeal decisions and to be told about all relevant channels to do so”.

Small business ombudsman Bruce Billson has joined others in expressing his support of the recommendations, citing the necessity of the Tax Office moving quickly in adopting the changes.

“This is a significant investigation and report by the Inspector-General of Taxation and Taxation Ombudsman, Ms Karen Payne, and the findings and recommendations are really important for delivering a better and fairer tax system,” he said.

Mr Billson noted the recommendation to update the Taxpayers’ Charter is a particularly important one. The report found over the past three years fewer than 1 per cent of Tax Office staff had attended a training course to teach them how to tell taxpayers about their rights to complain, review or appeal a decision”. Further, 60 per cent of taxpayers were unaware of or had not used the Tax Office’s complaints function.

“Tax issues are among the top concerns for small businesses, and it is critical for the Tax Office to step up as a modern revenue agency to help people as part of their Charter,” Mr Billson said.

“I am pleased the Tax Office has embraced this report from the Inspector-General and has committed to working through these important recommendations.

“I look forward to seeing the Tax Office implement these changes to improve the way it deals with taxpayers.”

While the recommendations have garnered widespread support across the tax profession, some are calling for further action.

Robyn Jacobson, senior advocate at The Tax Institute, said taxpayers’ right to be informed of their objection and complaint rights is fundamental to ensuring the tax system is fair and that all taxpayers are treated equally.

“However, the ATO should be mindful that simply informing taxpayers of their rights may not be enough,” Ms Jacobson said.

Going forward, Ms Jacobson said that resources could be made more easily available to taxpayers, whose hopes of disputing ATO decisions are often slim to none.

“It is important to explain, in plain English, the differences between the various options available to them. Taxpayers need to understand the instances where lodging an objection is the most suitable pathway compared to where lodging a complaint is more appropriate,” she said.

“Without this education and accessible information, taxpayers will continue to be left in the dark and may unwittingly choose an unsuitable pathway to their detriment.”

‘Significant investigation’: ATO reforms to create fairer tax system
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Emma Ryan

Emma Ryan is the deputy head of content at Momentum Media and editor of the company's legal publication, Lawyers Weekly.

Emma has worked for Momentum Media since 2015 and has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.

A journalist by training, Emma has spent her career connecting with key industry stakeholders across a variety of platforms, including online, podcast and radio. She graduated from Charles Sturt University with a Bachelor of Communications (Journalism).

Tax&Compliance