The Australian Tax Office planned to automate 1 million tax returns in 2014 as part of a broader plan to “liberate” 4.5 million taxpayers from completing tax returns, a senior official has said.
“Over time and with some careful and creative thinking, we think we could effectively liberate around 4.5 million taxpayers from any significant response burden at tax time, including up to 2.6 million self preparers,” Geoff Leeper, second commissioner for the ATO’s people, systems and services group, told an accounting conference in New Zealand last month.
Leeper told the Advanced Professional Solutions annual client conference in Queenstown that the ATO had written a roadmap for the future of tax and superannuation until 2020. By that date businesses would keep their records with accounting software which would automatically interact with the ATO and the business’ advisers on tax and government programs compliance, Leeper said.
Also on the roadmap was a standard chart of accounts developed by the ATO in consultation with industry for record keeping, dealings with banks and meeting tax obligations. The ATO would use the chart of accounts to determine a business’ tax obligations, and online accounting software would seamlessly provide data to the ATO.
Want to know about the ATO’s plans for SBR, digital forms and the impact on filing tax returns? Check out the Macpherson Report.
“In essence, through the use of business software, the records needed to run the business will automatically generate the data needed to meet business tax obligations,” Leeper said. The ATO had seen a boom in usage of its Standard Business Reporting framework with an expected 3.2 million transactions this financial year, up from 750,000 last year.
One goal of the reform was to improve the quality of service to businesses by the ATO and to reduce compliance costs of meeting tax obligations to the point where it was “a by-product of good record-keeping”.
Leeper gave several examples of how the ATO could improve the compliance process by making better use of technology.
- Tailored individual returns – A 30-year-old would not need to complete the label relating to the Seniors Tax Offset, for example.
- Re-using business software – The ATO is exploring how it can use a business’ accounting and business software to generate information required for tax purposes, such as payroll data.
- Reducing or eliminating simple tax returns – The ATO will start automatically completing tax returns and offer a “push” tax return to 1.4 million people in 2014.
- Use data mining to police and correct compliance – The ATO would use its 20-terabyte data warehouse to make automatic corrections to taxpayer-supplied data, predict lodgement patterns and predict ability to pay tax debts
The ATO would exploit information received about taxpayers’ affairs, such as income, bank interest, shares and dividends, and send the tax return to the taxpayer to sign. Denmark and Norway send nearly three quarters of tax returns to the taxpayer, and in Norway an individual who doesn’t respond is deemed to have accepted the return.
The full text of the speech was available through the ATO.