spacer spacer spacer spacer spacer spacer spacer spacer
spacer
spacer
    Latest Accounting News

Telephone: 03 9727 1244
Facsimile: 03 9727 0244
Email: Email Us

Address: Suite 2, 96 Manchester Rd, Mooroolbark VIC 3138
spacer
Hot Issues
Be alert for phoenix activity, businesses told
Equifax signs data agreement with ATO
E-invoicing will reduce emissions, says PwC
State and Federal Disaster support --- May 2022
Largest cities in the world 1500 to 2100
Last chance to claim the loss carry-back
Changes to recovery loan scheme for small and medium enterprises
About the cash flow forecasting template
Federal budget 2022: Winners and Losers
ATO puts 50,000 directors on notice.
FBT Reminder – Odometer Reading
Data matching program: government payments
Budget: Big wins for SMEs
Small businesses show sign of omicron rebound
Federal Budget 2022 - Overview
Federal Budget 2022 and YOU - Part 1
Federal Budget 2022 and YOU - Part 2
Budget at a Glance - Video
Undisclosed income risks hefty asset betterment assessments
Superannuation Guarantee (SG) increases
How stress and burnout are different, and why the difference is important
Accountants ‘have important role to play’ in digital transformation
ATO launches campaign to target tax withholding on overseas royalties
ATO releases new draft guidance products impacting private trusts
GDP by country since 1800
ATO releases new guidelines to combat identity theft.
Articles archive
Quarter 1 January - March 2022
Quarter 4 October - December 2021
Quarter 3 July - September 2021
Quarter 2 April - June 2021
Quarter 1 January - March 2021
Quarter 4 October - December 2020
Quarter 3 July - September 2020
Quarter 2 April - June 2020
Quarter 1 January - March 2020
Quarter 4 October - December 2019
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
ATO flags focus areas for combating $33.5bn ‘tax gap’

The ATO says it will be focusing on accessing new third-party data, automating audit processes, increasing its access to high-quality data and preventative strategies in order to drive down the overall tax gap.



ATO second commissioner Jeremy Hirschhorn explained that in order to reduce the tax gap, estimated to be $33.5 billion or 7.3 per cent of the tax that should have been reported for the 2018-2019 income year, the ATO is shifting its focus to prevention and reducing errors through increased digitisation.


Under its tax gap program, Mr Hirschhorn said the ATO is looking to maximise its use of preventative and deterrent strategies such as web material, practical compliance guidelines and taxpayer alerts as well as private rulings and guidance products aimed at advisers and intermediaries.


“If we are to sustainably improve the health of the system, first we must focus on maintaining voluntary compliance,” said Mr Hirschhorn in an address at the International ATAX Tax Administration Conference.


“There is little point, in a world of constrained resources, in simply ‘harvesting’ year one non-compliance, only to have that non-compliance grow back the next year.”


For individuals not in business, work-related deductions and rental-related deductions continue to be large contributors to the $8.4 billion tax gap for individuals, he explained.


With strategies based on audit activity unlikely to make a dramatic impact on those contributors without significant increases in resources, Mr Hirschhorn said the ATO is exploring different strategies in this area.


“This might include productivity measures such as automating routine aspects of an audit process, such as collection and collation of substantiation materials, but also accessing and utilising new ‘large-scale’ third party data such as rental income data or mortgage data,” he explained.


“It might also involve measures which increase perceived detection risk for the small group inclined not to fully comply, but also a focus on education for those who wish to comply but simply make mistakes due to the complexity of the system.”


For small businesses and individuals in business, Mr Hirschhorn said one of the drivers of the small-business gap continues to be the omission of income. 


While shadow economy behaviours are the largest driver of omitted income, Mr Hirschhorn said the ATO is also seeing inadvertent under-reporting of income driven by errors and poor record-keeping. 


“In fact, these behaviours account for around 90 per cent of incidence of error,” he stated.


The ATO’s ongoing focus he said will be on increased digitisation and access to high-quality data in order to reduce the possibility for taxpayers to make inadvertent errors.


The ATO, he said, is now in a data driving phase where its systems are primarily designed around verifiable data, rather than relying on data being brought to the system.


“This saves time and minimises the risk of inadvertent errors that have to be addressed later on bringing data to the system,” he stated.


“At the ATO, we are now starting to think about data on a curve: from ‘not verified’ data, through increasing levels of confidence in the data to ‘fully data-driven policy and system design.”


 


 


Miranda Brownlee


30 November 2021


 


accountantsdaily.com.au




21st-December-2021
 
sitemap | site by AcctWeb