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Tax Crisis - Hard Times Call for Hard Actions

Publication date: 13 Aug 02 | Source: THE TAX INSTITUTE

The Taxation Institute of Australia, Australia's largest tax specific organisation representing a diverse range of tax professionals, has called for a fundamental overhaul of tax administration and administrative laws, supporting the Institute of Chartered Accountant's sentiment that the tax administration system is in crisis.

'The crisis in tax administration is illustrated by the fact that tax experts made over 1 million calls dealing mainly with ATO administrative failures in the past twelve months' said Gil Levy, Senior Vice President, Taxation Institute of Australia.

'The root problem has been poor policy design from day one, combined with the Commissioner's inability to fast track administrative reform and the Government's failure to remedy the legal impediments to effective tax administration' said Gil Levy.

'The administrative issues that continue to hinder tax reform also include failure to establish proper procedures for the involvement of intermediaries such as tax agents in the system, the failure over three years to provide adequate running balance account information and access and a failure to quickly extend return/BAS lodgement times where blatantly necessary' added Mr Levy.

'The Institute acknowledges that the Commissioner has made some improvements, however, these improvements have often occurred, too little and too late - ignoring where these problems stemmed from' said Gil Levy.

'Better utilisation of ATO resources may resolve some of the problems, however, it will not address the systemic legal impediments to effective tax administration. An example of this is, that since October 2001, the Taxation Institute of Australia has lodged 43 recommendations for both major and minor reforms to make GST alone more efficient and to date there has been no response from the Government' informed Mr Levy.

'The Taxation Institute believes that a key solution to this micro-administrative reform would be for Government to introduce a compliance reduction reform bill which removes all of the administrative impediments across all areas of the tax and GST laws, many of which the Government and the ATO are currently aware of' concluded Mr Levy.