In a media release issued on 16 October 2009, the Assistant Treasurer, Senator Nick Sherry, announced the release of the Inspector-General of Taxation's (IGOT) Review into the non-lodgment of individual income tax returns, while announcing that the Rudd Government's tax bonus stimulus payment has reaped an important side-benefit by boosting the number of taxpayers who've lodged tax returns to an all-time high of around 96%.
Based on pre-tax bonus data, the IGOT found a non-lodgment rate of tax returns of 9.35%; however, using the latest data, the ATO now estimates only 4% of Australians have outstanding non-lodged tax returns.
The IGOT's Review into the non-lodgment of individual income tax returns made six formal recommendations, three to the Government and three to the ATO. The recommendations relating to the Government are:
- that the IGOT report be referred to the Australia's Future Tax System review for its information and use;
- the ATO be provided with access to more sources of third party data, together with TFNs and ABNs, for compliance purposes and to identify non-lodgers; and
- the penalties for failure-to-lodge are strengthened.
The Assistant Treasurer said that the Government has already acted on the first recommendation, but has declined to accept the others.
The IGOT's recommendations to the ATO are:
- that the ATO supplement its current reporting on lodgment compliance by a periodic report on the broader outcomes and impacts being achieved on the level of non-lodgment in the community;
- the ATO should flag low-risk non-lodged returns in its systems and identify them as a separate category in its management reports; and
- the ATO should progressively increase, where appropriate, the use of default assessments to further support lodgment compliance.
The ATO has indicated its agreement with all three recommendations.
For a copy of the Assistant Treasurer's media release, No 2009/071, 16 October 2009, go here
For a copy of the IGOT's report, "Review into the non-lodgment of individual income tax returns", 11 June 2009, go here