ATO gets some bites with its tax amnesty

The Australian Tax Office has had some success with its latest tax amnesty with more than three people a day applying under the scheme.

Tax Commissioner Chris Jordan told the University of NSW international tax administration conference yesterday the early results of the amnesty which offers lower penalties for those who come forward are “promising”.

“We are confident that this program will bring many taxpayers back into the system with direct and future compliance dividends,” he said.

The DO IT: Disclose offshore income today amnesty was announced at the end of March and is open until December 19.

The tax imposed will be limited to offshore income and assets in the past four years, penalties will be capped at 10-% and low level disclosures will attract minimum penalties.

Judd told the conference the level of willing participation for paying tax is “good” in Australia with more than 95% of the revenue collected coming in voluntarily; the balance as a result of “active compliance”.

Gavan Ord, business policy adviser at CPA Australia, told SmartCompany Judd’s speech was a “timely reminder” of the work the ATO is doing to become more agile and responsive.

“The amnesty is a good example of that work and a common sense measure that is obviously achieving results while mitigating the associated compliance costs,” he says.

But Inspector General of Taxation Ali Noroozi warned amnesties need to be used sparingly.

“Obviously the commissioner has made this offer to the extent that it does indeed bring more money to the ATO it can only be a good thing,” he says.

“It’s good as it brings people into the tax net but don’t want to repeat it too often as then people just wait until the next amnesty.”

Noroozi has just set out his work program for the year ahead which will focus on a review of the ATO’s taxpayers’ charter and taxpayer protections, a review of the ATO’s approach to debt collection, a review of the ATO’s services and support for tax practitioners and a review into the ATO’s conduct of employer obligation compliance activities.

He says all four measures are “geared toward SMEs” as this is where the majority of the complaints are coming from.