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Shape of small businesses to define digital approach: ATO

The ATO wants to make it easy to interact with the tax system.

Technology Tony Zhang 20 April 2022
— 2 minute read

The Tax Office is finessing its digital transformation to make it less complex for businesses, said acting commissioner Jeremy Hirschhorn.

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It is leading the digital charge with its recent e-invoicing adoption campaign along with the modernisation of business registration

Mr Hirschhorn said the ATO was looking to reduce digital complexity on businesses by leveraging natural systems.

He said the goal was to make the tax system – in partnership with digital service providers – as easy as possible to interact with.

“Underpinning all of our approaches is the philosophy around natural systems,” he said at a recent COSBOA conference. 

“How can we get data and information from natural systems, rather than asking people to extract data in many different ways and for different purposes? 

“How do we build the tax system of the future around the natural systems in which small businesses operate?”

Mr Hirschhorn said a key theme that would play out over the next few years was not just the digitisation of business tax, but also a broader digitisation of how businesses deal with the government.

“We are already seeing it through initiatives such as e-invoicing,” he said. 

“I would just point out here, that the ATO is helping catalyse that for the government but we are not in the middle of e-invoicing – we do not get the invoices that come through e-invoicing, those are direct invoices.

“We don’t want those invoices. We trust businesses to tell us about their business operations, we don’t need to see every invoice. 

“But we’re playing a really important role in the take-up of e-invoicing because we think it makes the economy better, we think it makes your businesses better and more successful: you can spend less time on billing and more time on your business.”

Mr Hirschhorn said this shift to digital was also seen in the modernisation of the business registry system. 

ABRS deputy registrar Michelle Crosby said recently that the first step in streamlining business records was going smoothly.

“We’ve got the job to modernise that – with ASIC – to make a single registry system so that you don’t have to spend your time filling in multiple registers, Mr Hirschhorn said. 

It is a multi-year project, but that’s our ambition.

“Director ID is another area which is aimed at a level playing field but also about how we make the system better.”

Mr Hirschhorn said the ATO recognised that sometimes these new initiatives would seem like a burden while they are being introduced, but there was a “pay-off in the long run”.

“I think of these key initiatives as pillars in our future service offerings and for the economy more broadly, he said.

“If I take Single Touch Payroll, for example, when we first introduced STP a few years ago no one would have thought it would underpin the largest ever salary subsidy scheme – JobKeeper – which saw $89 billion in much needed support flow through to the Australian community. 

“Thank goodness we had it. Where employers used good software for their STP reporting, claiming JobKeeper was easy. Similarly, we were able to administer $36 billion in cashflow boost payments without businesses having to lodge even a single additional form.

“So hopefully in introducing some of these key digital initiatives we are reducing immediate burdens but also giving ourselves so much more flexibility to introduce new measures in the future.”

Shape of small businesses to define digital approach: ATO
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Tony Zhang

Tony Zhang

Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.

Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.

You can email Tony at This email address is being protected from spambots. You need JavaScript enabled to view it.

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