Review of aspects of the Australian Taxation Office’s administration of private binding rulings
A report to the Assistant Treasurer
Table of Contents
Telephone: (02) 8239 2111
Facsimile: (02) 8239 2100
Level 19, 50 Bridge Street
Sydney NSW 2000
GPO Box 551
Sydney NSW 2001
3 May 2010
Senator the Hon Nick Sherry
CANBERRA ACT 2600
I am pleased to present to you my report on findings and recommendations in respect of the review of aspects of the Australian Tax Office’s (ATO) administration of private binding rulings. This report has been prepared under section 10 of the Inspector-General of Taxation Act 2003 (the Act).
I have provided the Commissioner of Taxation with the opportunity to respond to the report’s findings and recommendations. The ATO’s response is in Appendix 2 to the report. In finalising the report, I have fully considered the ATO’s response.
Overall, the review found that, up to the time when the ATO introduced a new computer system for the management of its private rulings, it had a strong performance in relation to the production of quality, timely and consistent private rulings. However there is an issue as to whether the new Siebel system which the ATO has introduced for the management of these rulings has already led or will lead to a deterioration in this previously strong performance.
The review led to six key recommendations, one of which (Recommendation 5) involves a recommendation to the Government to consider abolishing the oral rulings system given its continuing low level of usage.
Five key recommendations were directed to the ATO. Of these, the ATO has fully agreed or agreed in principle with three (Recommendations 1 to 3) and partly agreed with two (Recommendations 4 and 6).
The three recommendations the ATO has fully agreed (or agreed in principle) with involve the ATO taking steps to:
- identify, track and report publicly on the most frequently requested private ruling
- notify private ruling applicants and the public of when rulings on particular topics may be delayed because of escalation arrangements put in place for such rulings; and
- address delays and productivity issues that may arise from having large teams from different areas of the ATO working on private rulings.
One of the key recommendations the ATO has only partly agreed with concerns the register of private binding rulings. The ATO has agreed with the review’s conclusion that this register should be retained, but it has not agreed with a number of suggestions that the review has made to enhance this register.
The second key recommendation with which the ATO has only partly agreed concerns the introduction of the new Siebel computer system for the management of private rulings. The ATO has agreed to a post-implementation review of this new system but it has not agreed to give priority to ensuring that this new system’s search facility for locating other private rulings on a given topic matches the search facility for such rulings that was available under the old system.
As part of this review, I also examined the extent to which the ATO has implemented recommendations from the IGT’s 2008 Review of the potential revenue bias in private binding rulings involving large complex matters. The ATO fully agreed with six of the recommendations from this earlier 2008 review and partly agreed with the remaining four. I have concluded that the ATO has implemented all of the recommendations (or parts thereof) that the ATO agreed to implement as a result of this earlier 2008 review.
I offer my thanks for the support and contribution of professional bodies and individuals to this review. Their willingness to provide their time in preparing submissions and discussing issues with myself and my staff is greatly appreciated.
I would also like to thank my staff who have worked hard to conclude this review. As well, I would like to thank the ATO’s staff for their co-operation and assistance in this review.
Inspector-General of Taxation
© Commonwealth of Australia 2010
This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth.
Chapters 1 to 4: Helen Warner
Chapter 5: David Pengilley and Peter Glass