Commissioner responds to tax agent concerns over GIC remission

The Commissioner said while the ATO had shifted to a stricter approach on tax debts and the remission of GIC since the end of Covid, the ATO wants to ensure that decision on GIC remission are undertaken in a "consistent, disciplined and fair way".

"Our focus for granting remissions is on those who want to do the right thing, and usually do, but can’t – but our requirements for remission have not changed," said Heferen.

"We will continue to use the information you and your clients provide, as well as considering payment and compliance history of the taxpayer, to make remission decisions."

Heferen noted that the ATO received over 140,000 requests for remission last year, with many of them quite complex.

"It is inevitable that some decisions may be contestable. We encourage you to send us examples where you think we got the decision wrong so we can continue to strengthen the process," said Heferen.

The Commissioner said the ATO had also responded to the feedback provided by the Tax Ombudsman in her review in the ATO's approach to GIC.

"The Tax Ombudsman reviewed our approach to providing remissions for GIC and noted the strong view from the agent community that we needed to aim for better consistency," said Heferen.

"So we’ve put in place a number of mechanisms, which we’re building upon, to seek that consistency. Coupled with this is our intended firmer approach to try to ensure payment of all obligations is timely."

Heferen said that the ATO had shifted to a stronger stance on GIC and other penalties following the significant tax debts that accumulated during the covid period.

"I think it's pretty clear when you look at the numbers just prior to Covid and through Covid, I think some of the payment and lodgement aspects of the system got a little loose. Payments started to lag. As payments start to lag, debt grows, and there is a point in time at which the debt grows [to a level] that is unsustainable" Heferen in the ATO livesteam.

"We want to make sure that payment discipline, so lodging and paying on time, remains a fundamental part of the system.

"This means we are reshaping the way we provide remissions on General Interest Charge and we want to do that in a consistent, disciplined and fair way. But there is a shift and we'll be pursuing that even when there are external disruptions [such as] the war on Iran and the price of fuel goes up."

Heferen said that anyone affected by the rise in fuel costs, should contact the ATO.

"We can then have that discussion around whether there other things we need to put in place around remission," he said.

"However we want to make sure that we don't get back into a situation, which quite frankly we are looking at at the moment, where we've got a debt book of well over a $100 billion and well over $50 billion of that is classified as collectable. A lot of that has occurred from the system being administered too loosely in the past, particularly through Covid."