iscoverFollowing the Tax Office’s changes to the tax treatment of GIC and SIC, The Tax Institute is welcoming its route to implementing a principles-based approach to taxpayer relief provisions.
The Tax Institute ‘pleased’ with ATO’s taxpayer relief provisions approach
16 October 2025
•
9 minute read
The Tax Institute has provided feedback on the ATO’s approach to taxpayer relief provisions consultation paper and is pleased with the ATO’s comprehensive review of its settings and processes.
In a submission to the ATO authored by Julie Aballa, The Tax Institute's head of tax and legal, and president Tim Sandow, details and feedback were provided on confusing and unclear principles, impacts of proposed principles, missing elements, additional guidance and opportunities for improvement.
You’re out of free articles for this month
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
“We are pleased that the ATO is undertaking a comprehensive review of its settings and processes regarding taxpayer relief provisions,” Abdalla and Sandow said.
“This assessment is particularly relevant in light of the recent legislated changes to the tax treatment of the general interest charge (GIC) and shortfall interest charge (SIC) and also feedback from our members suggesting that the ATO is, in general, taking a stricter approach to matters relating to tax debts, such as decisions to remit the GIC.”
In terms of principles within the consultation paper being unclear or causing confusion, the Tax Institute said the term ‘taxpayer concessions’, as specified in the paper, had the potential to create confusion based on its conventional connotations.
The Institute noted the word ‘concessions’ generally suggested a reduction in tax obligations the government provided to support particular groups or organisations and often implied a more favourable tax treatment or a decrease in the overall tax burden.
“This common understanding may lead taxpayers to assume that the term refers to broad tax relief measures, which could misrepresent the specific intentions of the Consultation Paper,” Abdalla and Sandow said.
“In this context, ‘taxpayer concessions’ refers to specific mechanisms designed to help taxpayers manage their obligations more effectively, rather than reducing their primary liabilities.”
The submission noted the term also encompassed the remission of penalties and interest, which could alleviate the financial strain on taxpayers who struggled to meet their obligations.
Based on this, the Institute recommended not using the ‘taxpayer concessions’ term as it could be confusing and misleading in the context and should use ‘taxpayer relief’ instead.
When addressing the potential impact of the principles, Abdalla and Sandow said the principles served as useful guides for both taxpayers and the ATO, yet their true effectiveness and impact could have been contingent on how they were practically implemented in real-world scenarios.
“If the ATO successfully integrates these principles into its operational processes, fostering a culture of consistent, transparent, and principled decision-making, the overall integrity of the tax system could see significant improvement,” the submission said.
“This would not only enhance public trust in the ATO but also encourage voluntary compliance among taxpayers, as they would be more assured that their cases are being handled fairly and transparently.”
The consequences of the principles would be detrimental for taxpayers and the system as a whole in the instance they were applied in a manner that excessively restricted the exercise of discretion and limited access to relief provisions.
It was also recommended by Abdalla and Sandow that the framework of principles should encompass two additional principles of transparency and consistency, as transparency in the ATO’s processes was vital to the integrity of the system.
Consistency was proposed as it was crucial to ensure that similar cases received the same treatment and “it will be difficult in practice possible to properly assess whether ATO decisions are fair and consistent without transparent processes regarding decision-making and the outcomes of those decisions”.
Additionally, the submission said there needed to be more clarity around the practical application of the principles, as well as there being an opportunity to streamline the application process for relief to alleviate administrative burdens for both taxpayers and the ATO.
“Implementing more robust communication strategies to educate taxpayers about available reliefs could also lead to better engagement and more equitable access to relief.”
“Finally, if there are changes in the ATO’s approach to how it offers relief, this should be clearly and publicly communicated, with sufficient notice of the proposed change in approach.”
You need to be a member to post comments. Become a member for free today!
