The government has set up a Digital Transformation Office as part of the push to make government agencies more agile and innovative. The aim is to improve users’ dealings with government and lower the cost of that service delivery.
These are worthwhile ambitions as bad delivery of public services can hold back a nation. There is a
huge upside for the government if all agencies are able to improve efficiencies by moving away from traditional channels, saving taxpayers billions of dollars while improving service delivery.
The potential cost savings available through digital transformation are intrinsically linked to improving the quality of the service. A service transacted over the phone costs about 16 times the digital equivalent; through the post, about 32 times; and on face-to-face transactions it is about 42 times.
ATO and digital transformation
The ATO, as one of the largest government agencies, has to respond by improving its delivery of services.
It is just as hard in the private sector as the public sector as every single business is struggling with digital delivery. Government agencies are struggling with ageing legacy systems, which limit the speed at
which progress can be made.
In the case of the ATO, it has its share of ageing systems, notably, the ATO portal. The ATO portal allows
tax practitioners to access client tax information as well as communicate and complete a range of transactions electronically with the ATO. Tax practitioners use the ATO portal to amend returns, manage client information, generate ATO reports as well as lodge deferrals, objections and private rulings.
Another key service is the electronic lodgement service (ELS) which facilitates the electronic lodging of ATO forms via a software interface platform. To say the ATO portal is fundamental to tax practitioners’ day-to-day business would be an understatement.
The IPA fully supports improvements in ATO efficiency but not when it comes at the expense of tax practitioners. Offloading efficiencies at someone else’s cost does not fit with the government’s digital transformation agenda.
It’s about improvement in service delivery at a lower cost for all users. In a recent poll conducted by AccountantsDaily, over 80 per cent of the 409 respondents answered ‘yes’ when asked: As an accountant are you experiencing loss of productivity due to the use of technology by the ATO?
Through member feedback, the IPA has sensed a heightened tension with the ATO’s use of technology this year. The portal was already a major cause of frustration and dissatisfaction due to its instability and unreliability.
Transitioning to a digital delivery for BAS statements and the use of the client correspondence list were two recent digital interactions that put more reliance on the substandard portal.
The IPA flagged the less than ideal rollout of recent digital interactions at the quarterly gathering of the Australian Tax Practitioner Advisory Group (ATPAG) forum. The response we received from the ATO was encouraging and warranted. Many tax practitioners are small businesses themselves with little capacity to absorb any more productivity losses in servicing their small business and individual clients.
The ATO’s response
The tax office has acknowledged that its push towards more digital interactions, combined with existing ATO portal issues, has added to tax agent frustration and led to lost productivity for many small tax practitioners.
The ATO acknowledged this at the 21 August 2015 meeting of ATPAG. “Where the ATO is looking to develop technology or administrative changes, we will co-design and consult with a range of tax practices to build systems that consider and accommodate the current practice management procedures,” the ATO said.
“The aim will be to ensure that the changes do not add additional tasks that practitioners will need to accommodate outside of their normal processes, but rather will operate within the normal processes. We recognise the tax and BAS agent portals are an invaluable tool for them and we will continue to offer this service. However, as the portals were built on an older technology platform, this has limited our ability to build new functionality and has caused instability and slowness. We are thus progressively building the services and functionality currently available on the portal on a more reliable technology platform.
“We acknowledge that there have been significant issues with some of the portal functionality throughout this year. This has not created a good experience for tax practitioners and in some cases has led to lost productivity and certainly a great deal of frustration. But we have listened and understood the issues and concerns and have placed a great deal of resources into correcting issues and supporting tax practitioners,” the ATO said.
The IPA applauded the ATO’s acknowledgement of tax agent frustration and welcomed its commitment to address the issues in a consultative manner with the tax agent community. An IPA media release highlighted the ATO’s commitment to hold better consultations to design and build systems that consider and accommodate current work practice management procedures.
The IPA also took these concerns to the House of Representatives Standing Committee on Tax and Revenue, where the tax commissioner had to respond to these concerns to the committee directly.
Tax practitioners must act too
The IPA supports the better use of technology and tax practitioners must also evolve and modify their practices accordingly. Technology is driving changes across the profession and clients’ expectations are also changing.
Tax practitioners need to respond accordingly to continue to add value to their clients. While the number of individuals using tax agents has remained fairly constant at around 70 per cent of the population, practitioners may suffer considerable revenue loss in future, if their clientele is made up of a large number of individuals with simple tax affairs.
Taxpayers now have access to a range of online government services, such as myTax, where their tax details are held, which allows taxpayers to lodge returns electronically. As more and more taxpayers become familiar with this option, it will become more widespread.
If the government further streamlines deduction legislation, this could accelerate this trend to self-preparation and lodgement.
Accounting bodies such as the IPA have been encouraging members to consider these impacts on their business models and to look to add non tax related services such as business and financial advisory services.
Promising signs
The move from ELS to standard business reporting on 1 July 2016 will hopefully provide practitioners with some portal relief going forward. Practice management software providers have been busy trying to migrate ATO portal functionality into their software in preparation for the cut-off date.
This might provide some breathing space for the ATO as it migrates the portal to a more functional software platform in the long term. Tax practitioners are also wary of the
potential issues which may surface from deployment of new technology. This uneasiness is drawn from prior bad experiences when the ATO introduced its last major IT software upgrade for processing income tax returns.
The vast majority of taxpayers use tax practitioners to assist them in complying with the tax laws. Therefore the quality and efficiency with which these services are provided have a significant bearing on the effective functioning of the tax system as a whole, including minimising the overall delivery costs for the ATO.
Tax practitioners need good IT systems to support their vital role in maintaining the health of the tax
system. Improving the services and support that the ATO provides the tax practitioner community is in everyone’s interest as both are dependent on each other to play their roles within the tax system.
