The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today announced the commencement of public consultation for developing his new work program for 2014 and beyond.

The IGT seeks to improve the tax system for the benefit of all Australians by reviewing the administration of tax and superannuation laws by the Australian Taxation Office (ATO). The IGT also reviews policy directed at tax administration but not substantive tax policy, such as what and how much tax should be levied.

“My work program seeks to target areas that potentially provide the greatest improvement to tax administration for all Australians by consulting publicly and widely with taxpayers, tax professionals and their representatives,” Mr Noroozi said. The IGT may examine certain taxpayer cases to better understand how improvements could be made to the tax system as a whole. However, the IGT does not address single taxpayer complaints – that is the role of the Commonwealth Ombudsman.

“The public consultation commencing today is a valuable opportunity to voice your concerns with the administration of the tax system. As the ATO is a monopoly service provider to the Australian community, it is imperative that effective governance and scrutineering functions address such concerns,” he said. The law gives the IGT unrestricted access to the ATO’s internal systems, records and personnel to identify and investigate matters of concern.

“I have the power to navigate the ATO’s systems, report publicly on stakeholder concerns and make recommendations for improvement,” said Mr Noroozi. The IGT’s reports address a broad range of concerns affecting taxpayers. Examples include reviews into the self assessment system, alternate dispute resolution, the superannuation guarantee charge, small business cash economy benchmarking and tax audits including those of individuals and small businesses. The vast majority of the IGT’s recommendations to the ATO are accepted and implemented. The IGT has also made recommendations to Government which have been accepted and implemented.

“Each IGT report is an incremental improvement that in aggregate provides enduring benefits to the tax system. The interactions amongst the IGT, the ATO, taxpayers, tax professionals and their representative bodies are crucial to the realisation of such improvements,” Mr Noroozi said. The IGT maintains the strictest confidence with stakeholders who raise issues or concerns. Where applicable, legal professional privilege is also maintained in relation to any matters raised with the IGT.

“I invite you to have your say in how administration of the tax system may be improved. I’m seeking the broadest engagement practicable. I will consider all the issues raised and review matters with the most potential for making tax administration fairer, simpler, more transparent or more efficient,” Mr Noroozi said.

As part of the consultation process, you may make submission on any systemic issues that you have observed from your recent interactions with the ATO. You may also wish to comment on potential review topics which have either been raised by stakeholders over the previous year or have emerged from the conduct of previous IGT reviews. These potential review topics include whether:

• a taxpayer bill of rights with enforceable remedies for inappropriate ATO conduct is needed or whether the current Taxpayers’ charter and compensation schemes provide sufficient taxpayer protection;
• the ATO’s approach to debt collection is appropriate, including whether it sufficiently considers taxpayers’ and third party creditors’ viability, both in terms of disputed debt and collectable debt;
• the ATO’s support for tax practitioners is adequate, including its approach to differentiated lodgement programs, electronic lodgement, payment and advice systems access;
• the ATO’s approach to test case litigation and funding arrangements allow taxpayers to conduct their case appropriately, including appeals on adverse decisions to a higher court;
• the ATO’s application of the general anti-avoidance rules (GAAR) is appropriate, including the management of relevant evidence, case selection, cost-benefit analysis, reputational impacts, internal decision making and also the level of the GAAR Panel’s independence;
• the ATO’s administration of the product ruling system is appropriately managed and accessible to taxpayers;
• the ATO’s audits of employer obligations, such as fringe benefits tax and PAYG withholding, supports and delivers appropriate, accurate, timely, consistent and transparent decisions;
• the ATO’s approach to information security sufficiently ensures data integrity and safeguards against cyber attacks and identity fraud;
• the ATO’s audits of not-for-profit organisations adequately considers their arrangements, exemption status and tax deductibility for donations received; and
• the ATO’s corporate quality assurance process (Integrated Quality Framework) is effective in identifying improvement opportunities and management’s effectiveness in delivering required change.

“I encourage taxpayers, tax professionals and their representative bodies to comment on the suitability of the above topics as well as raising any other topics arising from their interaction with the ATO,” Mr Noroozi said.

Submissions close 21 March 2014. Your submissions may be sent via email to [email protected]. For further information on the IGT’s office including reviews please refer to the website at www.igt.gov.au.

SYDNEY 9 February 2014

Media contact: Ali Noroozi – (02) 8239 2111