Review into improving the self assessment system
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
24 August 2012
The Hon. David Bradbury MP
Assistant Treasurer and Minister Assisting for Deregulation
Canberra ACT 2600
Review into Improving the Self Assessment System
I am pleased to present my report of the review into improving aspects of the income tax self assessment system.
This review arose largely due to an emerging global trend amongst revenue agencies to bring compliance activities forward and, in some cases, prior to lodgement of returns. It seems that the pendulum is swinging back from pure self assessment to a quasi-full assessment system, without many of the perceived benefits of the former regime. The review has focused on areas in need of most attention which were highlighted by a wide range of individual and business taxpayers, tax practitioners and their representative bodies.
Overall, I have made 33 recommendations directed at improving taxpayer certainty, reducing compliance costs and rebalancing taxpayer protections. Almost half of these are directed to the Government whilst the remainder are directed to the ATO.
A key area identified for improvement, amongst others, is the augmentation of existing public consultation processes with tripartite tax law design teams (comprising ATO and Treasury senior officials as well as paid external tax experts) who are engaged to provide advice on the proposed tax law, relevant explanatory memoranda and the nature and timing of ATO advice.
I have also made recommendations relating to key features of the current self assessment regime including, the penalties and interest regime, the Commissioner’s administrative discretion, amendments periods and the ATO’s advice framework.
The ATO has agreed, either in full, in part or in principle, with the vast majority of the recommendations made to it. The main disagreement, relating to declaring e-tax and a reinstated TaxPack as public rulings, gives rise to uncertainty particularly for individual taxpayers.
I offer my thanks to taxpayers, tax practitioners and their representative bodies for their time in preparing submissions and discussing issues with myself and my staff. I also thank the ATO and Treasury officers for their professional cooperation and assistance.
Inspector General of Taxation
© Commonwealth of Australia 2012
Ownership of intellectual property rights in this publication
Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia (referred to below as the Commonwealth).
Creative Commons licence
With the exception of the Coat of Arms (see below), the IGT logo and ATO sourced material, this publication is licensed under a Creative Commons Attribution 3.0 Australia Licence.
Creative Commons Attribution 3.0 Australia Licence is a standard form licence agreement that allows you to copy, distribute, transmit and adapt this publication provided that you attribute the work. A summary of the licence terms is available from http://creativecommons.org/licenses/by/3.0/au/deed.en. The full licence terms are available from http://creativecommons.org/licenses/by/3.0/au/legalcode.
The Commonwealth’s preference is that you attribute this publication (and any material sourced from it) using the following wording:
Source: Licensed from the Australian Government Inspector-General of Taxation under a Creative Commons Attribution 3.0 Australia Licence.
The Australian Government Inspector-General of Taxation does not necessarily endorse third party content of this publication.
Use of the Coat of Arms
The terms under which the Coat of Arms can be used are set out on the It’s an Honour website.