After a two and a half year inquiry into tax office administration that spanned two Parliaments, the Joint Committee Of Public Accounts and Audit have concluded…wait for it…drum role please…A simpler tax system is needed in Australia. Haven’t we heard that one before?
The report was tabled in Parliament last Thursday by committee chair Sharon Grierson MP the member for Newcastle. I must say that I’m not impressed with Ms Grierson’s report as the committee did not take up my recommendations relating to tax office settlements with Corporate Australia. Crikey readers may recall I told the committee about some shonky settlements that were on the public record, including the infamous Robert Gerard tax fiasco.
I was concerned that the big end of town were being granted generous tax settlements by senior ATO officers while ordinary Australians were being penalised and prosecuted with pitiless abandonment. I told them that these settlements could be costing Australia millions if not billions of dollars. I recommended that a bi-partisan parliamentary committee be formed to oversee any settlement over $10M and these decisions be videotaped and reported to parliament in the commissioner’s annual report without identifying the taxpayers concerned.
Ms Grierson said:
It is widely accepted that settling can be an efficient way to conclude a matter. Once again, the ATO has a policy to govern this activity and the Committee did not receive compelling evidence for change.
What we got instead was a reiteration of the recommendation of the Senate Economics References Committee in 2000. The tax office defied this recommendation back then so let’s see if Ms Grierson can hold current Tax Chief Michael D’Ascenzo to account this time.
Recommendation 17: The ATO publish in its annual report additional statistics in relation to settlements, such as the revenue collected through settlements and the proportion of amended assessments that taxpayers agree to pay. The ATO should also comment on significant variations across business lines.
So here we are again at the end of another financial year and taxpayers are conjuring up their fanciful tax deductions to obtain a hearty tax refund. Will I claim another $20 for dry cleaning? Will I add another $100 for travel expenses? Meanwhile down at the big end of town Corporate Australia executives are on the phone to tax office big wigs organising their next lunch. They should invite Sharon Grierson. Many happy returns.
It is not clear if ATO settlements cover only reassessments under the general provisions of the Income Tax Assessment Act and Part IVA (tax avoidance), but also situations where the Commissioner can decide under S 8F of the Taxation Administration Act not to prosecute but to treat an offence otherwise than as a prescribed taxation offence.