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Increasing digitisation and lowering collectible debt are centrepieces of the office’s latest corporate plan.
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Small-business debt a key target, ATO reveals
18 August 2022
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10 minute read
“Targeted strategies” to collect small-business debt with the goal of returning to pre-pandemic levels are one of the key focus areas for the ATO in 2022–23, it says in its latest corporate plan.
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The debt collection effort would “use data-driven insights” and “resume firmer and stronger lodge and pay activities” to address the growth in debt during COVID, although the ATO would be “balancing debt recovery with small business support” as it revitalised its tax function.
The goal was to reduce the ratio of collectable debt to net tax collections to less than 6 per cent by 2025–26, from a level in the current year of 8–8.5 per cent.
The debt focus is one of seven key areas outlined in the corporate plan, which reveals an increasing reliance on digital information.
Another focus would be the ATO’s move to a “modern, secure IT infrastructure by relocating to a new data centre” and enabling even more digital investment by identifying efficiencies “[and] recalibrating some areas of our work”.
Data collection is key to all the focus areas, which take in the modern business registry project, expanded use of STP, in-depth cyber security and developing a “digital first tax ecosystem” for small business to improve its “tax performance and participation”.
In a foreword to the plan, Commissioner Chris Jordan said COVID showed the integral role played by the ATO in supporting the community through a challenging period.
“We delivered vital stimulus to millions during the pandemic and proved we are much more than a revenue collection agency,” he said. “We are at the cutting edge of government service delivery, and we are continuing to undertake significant programs of work. We are acknowledged as a world-leading taxation authority.”
He stressed the importance of data collection as a way of getting tax assessments right the first time, and said the ATO was aware of the need for heightened security for the sensitive information it collected.
“One of our most exciting and important areas of work is in our use of data and digital. Data underpins our client service, our early intervention activities and our goal of prevention rather than correction. We’re simplifying interactions and embedding what we can into natural systems so people can get things right up front with minimal intervention from us,” he said.
“Having one of the largest data stores in Australia, keeping our data safe and secure is a significant responsibility and is the driver for our focus on cybersecurity and the transition to the new data centre.
“Our data stores are growing every year, so keeping our systems safe and protecting the personal information entrusted to us by taxpayers is paramount.”
And he said the goal of addressing collectable debt that arose during the pandemic would be balanced by sympathy for the predicaments of individual clients.
“With the substantive return to business-as-usual across the country, we are undertaking targeted strategies to address collectable debt, re‑engaging with clients to tailor solutions to their circumstances, and doing so with empathy and understanding,” he said.
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