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25 Nov 10 Review of aspects of the ATO’s administration of private binding rulings released

In media release No 2010/017, issued 24 November 2010, the Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, announced the release of the report of the Inspector-General of Taxation (IGOT) entitled "Review of aspects of the Australian Taxation Office’s administration of private binding rulings", dated May 2010.

In his letter to the Minister, the IGOT said that the review led to 6 key recommendations, one of which (Recommendation 5) involves a recommendation to the Government to consider abolishing the oral rulings system given its continuing low level of usage.

In relation to this recommendation to the Government, Mr Shorten said:

"With regard to this recommendation, I have asked Treasury to assess the current suite of advice products available to individual taxpayers that have simple affairs and prepare their own tax returns before the Government makes a decision. I have also asked Treasury to seek the views of taxpayers."

The IGOT said that 5 key recommendations were directed to the ATO. Of these, the ATO has fully agreed or agreed in principle with 3 (Recommendations 1 to 3) and partly agreed with 2 (Recommendations 4 and 6).

The 3 recommendations the ATO has fully agreed (or agreed in principle) with involve the ATO taking steps to:

  • identify, track and report publicly on the most frequently requested private ruling topics;
  • notify private ruling applicants and the public of when rulings on particular topics may be delayed because of escalation arrangements put in place for such rulings; and
  • address delays and productivity issues that may arise from having large teams from different areas of the ATO working on private rulings.

One of the key recommendations the ATO has only partly agreed with concerns the register of private binding rulings. The ATO has agreed with the review’s conclusion that this register should be retained, but it has not agreed with a number of suggestions that the review has made to enhance this register.

In his letter to the Minister, the IGOT also expressed his concern, saying:

"Overall, the review found that, up to the time when the ATO introduced a new computer system for the management of its private rulings, it had a strong performance in relation to the production of quality, timely and consistent private rulings. However there is an issue as to whether the new Siebel system which the ATO has introduced for the management of these rulings has already led or will lead to a deterioration in this previously strong performance."


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