09 April 2020

Review Status Update – Review into Undisputed and Uncollected Tax Debts deferred due to COVID-19

The Inspector-General of Taxation and Taxation Ombudsman (IGTO) commenced an investigation and exploration into undisputed and uncollected tax debts in Australia on 31 October 2019. The review seeks to understand the trends and landscape of outstanding undisputed tax debts in Australia for the financial years ended 30 June 2017 – 2019. The economic landscape and tax priorities have significantly changed since commencing this review – business and employee tax disruptions arising from bushfires and other natural disasters, as well as economic and health disruptions arising from responses to the COVID-19 pandemic.

Although the investigation has made significant progress, the IGTO has decided to defer progress of the investigation and finalisation of the report given the exceptional circumstances arising from the COVID-19 pandemic. Deferring our report will provide a number of benefits as set out below.  It will also provide an opportunity to observe and identify learnings from dealing with and recovering from these exceptional circumstances.

Deferring the completion of this review investigation will allow:

  • Australian Taxation Office (ATO) staff to focus on the front-line delivery of the Government’s stimulus package and measures to support the economy to recover from the COVID-19 pandemic;
  • IGTO staff to focus on the complaints service delivery which is also critical to the successful delivery of the Government’s stimulus package and measures to support economic recovery from the COVID-19 pandemic;
  • The investigation to consider any lessons learned from the consolidation of the ATO systems for income tax and activity statements which took place in December 2019/January 2020;
  • any final report to include more up-to-date data for the financial year ended 30 June 2020;
  • the investigation to incorporate insights into the operation of the debt collection provisions in the taxation administration system where there is a deliberate administrative decision to defer the collection and payment of taxation — that is, not to collect tax — because of a natural disaster (floods or bush-fires) or a pandemic (such as COVID-19).

We will provide further details and updates as information comes to hand. Thank you for your understanding and co-operation in these challenging times.

Karen Payne
Inspector-General of Taxation and Taxation Ombudsman