Longer wait times the ‘trade-off’ for more consistent GIC decisions, says commissioner

A review by the Tax Ombudsman in March found that the ATO's inconsistent decision-making, vague guidance and poor communication were leading to confusion and unfair outcomes for taxpayers in relation to GIC remission.

Speaking at The Tax Summit in Sydney, Heferen said longer processing times were the “trade-off” for ensuring that decisions were consistent and fair for taxpayers and managed by specialists with the appropriate training.

“Every taxpayer should be treated alike, and decisions about remitting interest charges should be based on a taxpayer’s circumstances and the merits of the case, not on who happens to answer the phone at the ATO on a particular day,” said Heferen.

"That's why we’ve limited over-the-phone GIC remission amounts to $2,500 and centralised complex decisions with specialised officers. Given the wide variation in circumstances that lead people to seek a remission, having a smaller group of trained specialists making those decisions is the most effective way to achieve consistent outcomes.

“Of course the trade-off is that this approach can take longer. We acknowledge this, and we’re working hard to improve processing times.”

Heferen said that while the previous decentralised approach may have delivered faster decisions, it also increased the risk of similar cases being treated differently.

He also said the ATO's efforts to standardise and automate simpler parts of the tax system would free up resources for more complex areas, such as GIC remission decisions, where human judgement is needed.

“We need to make sure that our people are freed up to do the complex [things] that require judgement, empathy and really thinking through the facts,” he said.

The ATO also warned businesses that it would not tolerate businesses using tax debts as working capital. 

“If the business has capacity to pay but chooses not to, it’s fundamentally a fairness issue,” said Heferen. 

Heferen said that while many taxpayers are dealing with genuine cash flow pressures and difficult choices, accountants, as trusted advisers, are often best placed to help clients prioritise their obligations and make informed decisions when times are tough.