The Inspector-General of Taxation (IGT), Ali Noroozi, today announced the terms of reference for his latest review entitled “Improving the Self Assessment System” and called for submissions.

In 1986-87, the Australian income tax system moved from full assessment to self assessment, increasing taxpayers’ responsibilities and compliance burdens.

Mr Ali Noroozi said, “In the current environment of ever increasing tax law complexity, real-time audits, pre-assessment agreements, disclosure requirements and the like, this review will test some of the fundamentals of the self assessment regime. In particular, it will examine whether the compliance burden is appropriately shared between the ATO and taxpayers and whether taxpayers are provided with appropriate certainty and timely guidance.”

In 2003, the Department of Treasury reviewed aspects of income tax self assessment in its so called ‘ROSA’ review and made a number of recommendations for improvement which were to be effected primarily through administrative change by the ATO and some changes to the law.

In consultations on the IGT’s forward work program, stakeholders generally agreed with the overall aim of the ROSA recommendations which was to increase certainty and reduce compliance costs for taxpayers. However, they questioned whether a number of the recommendations were implemented as intended. They also indicated that there was significant room for improvement, particularly in light of the range of changes to the tax system since ROSA was conducted.

“In this review, I will consider the ROSA recommendations and their implementation as a starting point. The ultimate goal is to assess aspects of the current self assessment system and establish additional opportunities for improvement,” said Mr Noroozi.

“Specifically, the review will consider the ATO’s existing advice framework and responses to tribunal and judicial decisions as well as the appropriate use of the Commissioner’s discretions to effectively manage the tax system,” he said.

“I assure people that your submissions and identities will be kept strictly confidential and not disclosed to anyone, including the ATO. In making your submissions please consider the terms of reference and submission guidelines. My aim is for balanced thinking on the issues to lead to better outcomes for both tax administration and taxpayers alike. Please outline both positive and negative aspects in responses,” he said.

Terms of reference and submission guidelines for the review are available on the Inspector-General of Taxation website: www.igt.gov.au. Submissions are due by 21 July 2011.

SYDNEY

16 June 2011
Media contact: Ali Noroozi – (02) 8239 2107