14 Oct 11 Preamble - Friday 14 October 2011
As mentioned in a recent edition of TaxVine, The Tax Institute was invited to appear before the Joint Committee of Public Accounts and Audit (JCPAA) at Parliament House in Canberra.
This parliamentary committee exists to hold Commonwealth agencies, including the ATO, to account for the lawfulness, efficiency and effectiveness with which they use public monies. It is currently chaired by the Independent Member for Lyne, Rob Oakeshott MP. The JCPAA recently resolved to invite tax oversight bodies (e.g. the Inspector General of Taxation) and professional bodies, including The Tax Institute, to outline concerns about the ATO’s performance, suggestions for improvement, and the future direction of tax administration.
Tax Counsel Tamera Lang ATIA and I gladly accepted this opportunity to appear before the committee and answer their questions on 23 September 2011, a transcript of which is now available on the Parliament House website.
At the outset, we thanked the JCPAA for their interest in ensuring there is increased public and Parliamentary scrutiny of the ATO. Delivering outcomes on complex tax legislation is not easy and the ATO faces many challenges in performing their role. Although overall they do a good job, there are times when they do not, and those failures need to be acknowledged and resolved. It is very important that there is an open dialogue between the profession and the ATO, and for the professional bodies to have a strong role in maintaining a constructive relationship.
For the Commissioner’s part, he acknowledged the increasing levels of complaints and diminution of service standards following the Change Program that had been highlighted by the JCPAA in the March 2011 hearing. He reported that the ATO has achieved a “bounce back” with reduced complaints and good performance in terms of processing standards.
The committee devoted some time to questioning the Commissioner on the handling of compromised tax file numbers (TFNs). The ATO advised that for most compromised TFNs, the processing time is below 28 days, though some 300 cases have taken over 90 days to resolve.
The Commissioner made some interesting remarks about recent Part IVA decisions (many of which have found in favour of taxpayers). He said that “there are some very worrying signs in relation to the courts’ approach to the general anti-avoidance provisions”, though noting that the courts are the ultimate arbiters of the law. In this regard, we noted that Treasury are currently reviewing the anti-avoidance provisions and you can read our views on the provisions in the submission we made earlier this year. We will certainly be involved in ensuring that the profession’s view is heard on any potential changes to these important provisions.
The JCPAA’s full report and recommendations following the hearing will be available in the coming months. If you have any questions about the evidence The Tax Institute gave at the hearing, or have concerns about remarks made by the ATO, please contact me at Tax Policy.
Robert Jeremenko FTIA