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04 Jul 13 On regulation and compliance

MEMBER 136 writes:

“Some years ago, I attended a law subject run by Monash University on regulation and compliance. I was one of only three only law students present. The rest were public servants from various government departments. It did not bode well for the future of rational regulation.

As the course progressed, what became apparent was that they did not have an idea of the practicalities of ‘the real world’; morning tea discussions consisted of past stories of allegedly dishonest (albeit unprosecuted) behaviour of the general citizenry; lunch more of the same, and as the course progressed, discussions as to how that general citizenry would be brought to heel.

What we are now seeing from the ATO is the end result of that educative process; focus, concentration and funding directed towards regulatory compliance activities in order to catch the one-per-centers; without regard for the 99% who try to comply but get caught up in a regulatory net which even the legal fraternity struggles to decipher.

If the funding dollar were directed towards adequately resourcing the ATO to educate and inform; if it were directed towards adequately resourcing the tax agent community in assisting its clients to comply (rather than the ever-present and pervasive cost-burden shift); then voluntary compliance would become commonplace.

The one-per-centers would still exist, but the 99% of the taxpaying community (including tax agents) who try to comply would breathe a collective sigh of relief. The resourcing of compliance activity would then rightly be directed towards the apprehension of the minority of dishonest taxpayers, rather than the current blanket scatter gun approach.

Who knows, there may even be dollars left over to fix the pothole.”