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Agents that rely on high-volume business will be unviable within five years, Chris Jordan says, with full digitisation by 2030.
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ATO boss outlines future ‘where tax just happens’
08 September 2022
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11 minute read
ATO Commissioner Chris Jordan has outlined a future where tax “just happens” and warned agents that any business based on high-volume, low-margin, simple tax returns will be unviable in three to five years.
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He said the ATO had a vision to be fully digitised by the end of the decade with systems designed for real-time tax collection, but assured attendees at Xerocon in Sydney that “we have no intention of designing tax professionals out of the system”.
“We know that nothing will ever ‘just happen’ without you,” Mr Jordan told the crowd, “in fact, we’d really like you to be in the driver’s seat alongside us.”
Mr Jordan said the ATO had only recently reached agreement about how it would progress.
“Last week our executive group endorsed a new digital strategy which has a vision for the ATO to be fully digitalised by 2030,” he told Xerocon delegates.
“The OECD’s Tax Administration 3.0 is our vision for 2030, where seamless, integrated, and automated systems allow data to flow from the systems taxpayers already use, to ours, without any extra effort or intervention from them.”
Under this vision, “reporting, payment and real-time compliance checks coincide with the taxable event”.
Outlining five principles to guide the ATO’s, he asked the audience to picture a future “where businesses no longer need to do monthly or quarterly GST reporting”.
“If digital systems can bring together point-of-sale, banking and e-invoicing data at the time of purchase or sale, can their systems report the GST paid or collected to the ATO in real-time too?
“And if we have this real-time GST system, as well as real-time payroll events coming out of STP software, and real-time PAYGI coming out of accounting software, perhaps we can imagine a BAS-free future. We’re dreaming big, but this is the essence of Tax Admin 3.0.”
Mr Jordan said the ATO used to think of itself as the centre of the tax universe, but now it knew better.
“We view ourselves as just one part of a very big tax ecosystem, and we know the key to creating optimal digital experiences is co-design.
“We need to work together to design solutions where taxpayers, tax professionals, digital service providers and the ATO all genuinely benefit and can clearly see what’s in it for each of us.
“You won’t be designed out of the tax system as technology progresses
“I want to assure you that we have no intention of designing tax professionals out of the system as technology progresses.
“We value our partnerships with you, and we want to support you to add value to your clients.”
Mr Jordan said one of the five principles, “sustainable digitisation and benefits”, had demonstrated its worth during the pandemic.
“What this means is, wherever possible we re-use existing systems and capabilities. And we design new systems with re-use in mind.”
“JobKeeper is an excellent example of this in action. Together with the fiscal group in Treasury, we designed the JobKeeper payments around the systems we had already built for STP. This facilitated fast and efficient delivery, and importantly, ensured integrity.
“When an employer applied for JobKeeper and said they had eight employees, we knew whether that was true or not based on their regular payroll reporting.
“It also meant we could move quickly. We built the system and started making payments within six weeks, and 97 per cent of payments were made within four business days from application.”
He said with complete digitisation, system security and integrity was more important than ever and was a motivation behind one key project, the modernisation of Australia’s Business Registry Services starting with mandatory director IDs.
“We defend against more than 2.5 million attempted cyber intrusions each month, and in peak months like tax time, this rises to over 3.5 million,” he said. “Protecting our data and digital systems is a massive undertaking and a responsibility we take very seriously.
“We have begun a fundamental shift towards embedding fraud prevention measures into systems as part of the initial design process.”
He concluded by saying the ATO would do everything it could to support agents as their roles changed and their jobs shifted focus.
“But you must understand that if your business model is high-volume, low-margin, simple tax returns, your business will not be viable in 3 to 5 years. You should be looking to diversify to remain viable longer-term.
“Focus on becoming a brilliant and trusted adviser. Focus on improving the tax performance of your clients. Help them avoid simple mistakes by using all the data we make available. Help them avoid over-claiming by asking the right questions and checking things that just don’t seem quite right. Help them get on top of their debt.
“The future is a world where ‘tax just happens’.
“But it will never happen without you.”
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