The administration of Australia’s tax and superannuation systems is shaped by a vision that Australians value these systems as community assets, and willing participation is recognised as good citizenship.
We also have strong corporate values and we have focused on enhancing our capabilities and providing high levels of assistance to taxpayers and their agents.
So what does that mean for all of you – as public accountants?
Independent public accountants perform many functions, including auditing financial statements, designing financial accounting systems, assisting in managerial accounting functions, providing managerial advisory services and tax preparation. The public accountant may perform services for individuals, corporations, partnerships and other organisations.
Your integrity and diligence in the performance of these functions is critical in enabling the Australian community to engage with a range of financial systems, including those that support our community’s tax and superannuation systems.
Importantly for me, your willingness to work together with the ATO through our consultative forums and our broader efforts to co-design strategies and administrative approaches to ensure we hear the voice of public accountants, has helped strengthen our relationship and our administration of the tax and superannuation systems.
Creating partnerships
Over the past seven years as Commissioner, I have set out to engage with as many external organisations as possible. I believe our administration of Australia’s tax and superannuation systems is among the best in the world, and I also firmly believe the relationship we have with organisations such as the Institute of Public Accountants is crucial to that continued success. I am very proud of the relationship the ATO now has with the IPA. To keep the ATO as a leader in tax administration, it makes sense to listen to organisations such as the IPA and to act on its good advice.
A recent example of listening and acting is the launch this year of the Tax Practitioner Action Plan. The Plan was a direct outcome of the feedback we had been receiving from tax practitioners and continues to further increase the ATO’s positive engagement with the profession.
It’s this sort of collaborative relationship which ultimately improves the standard of services we offer the Australian taxpayer. I have always placed great emphasis on building relationships with key players and a commitment to consult, collaborate and co-design on the journey of building shared community ownership of Australia’s tax and super systems.
Driving change
On 29 October 2012, I released my annual report to Parliament. I encourage you to take a look at it if you are interested in the ATO’s performance in 2011/12 and its plans for the future. It can be accessed on line at ato.gov.au/annualreport.
I believe the ATO has a strong future in driving service, cultural and technological change and, with your help, will continue to build trust and confidence in our administration.
The success of tax time demonstrates the benefit of a close working relationship. At a practical level, public accountants each year prepare a significant percentage of Australian’s tax returns. For the 2011/12 financial year, we have processed 7.6 million tax returns and refunded more than $15 billion to the Australian taxpayer so far.
One area where we have received both compliments and criticism is in relation to our new risk filters for individual returns. This suite of analytical models detects and stops potentially over-claimed or fraudulent refunds. While these filters add two days to our processing time, last year we adjusted around 60,000 of the 109,000 returns we took offline for further consideration. Of these, 79,000 were subject to a fuller review, protecting for the community around $200 million in incorrect claims. However, while last year we only stopped less than 1 per cent of the total refunds processed, this did involve a delay for those taxpayers where we made no adjustment.
Listening to feedback
We’ve listened to feedback and we have refined our models, provided more time for taxpayers to provide supporting documentation and improved our communication. In terms of processing times overall, we are bettering our service standard of 94 per cent of returns in 12 working days.
I feel strongly that tax practitioners and the community should have the opportunity to understand and provide input into our compliance activities. To that end, one of the things we did was engage more purposefully with you in preparing this year’s compliance program.
We worked with many of you to test the compliance risks that we had identified and sought your views on other risk areas we should consider. These conversations proved beneficial in that they broadly confirmed our areas of focus as those rightly requiring attention.
This year, we achieved 20 of our 22 service standards – just falling slightly short on two. This is an outstanding achievement, especially in terms of the progress it represents on the previous year, and is largely due to all the behind-the-scenes work we have done, including taking on board feedback we received from the IPA and others.
Consistent with our corporate values, we have also continued to assist individuals and businesses who have been doing it tough and are in short-term financial difficulties.
It was pleasing for me that the Joint Committee of Public Accounts and Audit, in its report 426, recognised that our willingness to engage through consultative forums at a senior level was seen in a very positive way by the tax professional organisations. Even more pleasing was the Committee’s positive comment on our relationship with the tax profession, noting “…reassurances provided by the professional bodies that relationships and interactions with the ATO were solid and also continuously improving. The Committee recognises the ATO’s significant and commendable efforts in this area.”
By now, you will all know that this is my last year as Commissioner. Reflecting back on my career with the ATO, it has been an honour and a privilege to serve the nation in a very tangible way. I did my best.
I leave knowing that the ATO is in good shape, with a firmly embedded and ambitious vision, strong values and improved capabilities. In addition, there is a solid relationship with our external stakeholders, including the accounting profession.
I thank you again for your support, and I wish you and your families a very happy and enjoyable festive season and a successful 2013.
