The Australian Taxation Office and Treasurer Joe Hockey recently announced an automated tax refund plan for taxpayers with straightforward deductions from July 1. Under the plan, as many as 1.4 million taxpayers would receive a pre-filled tax return from the government and receive their tax refunds automatically.
However, the ATO was unable to give BoxFreeIT details as to which taxpayers would qualify for the plan or the maximum number of deductions it could process.
The ATO also gave no indication of how taxpayers can find out whether they are eligible for the plan.
“We’ve identified this as a possible service initiative and we’re working towards it,” said an ATO spokesperson. Industry insiders expected another announcement within the next month or two clarifying the details of the plan.
Over 4.5 million taxpayers were expected to be included in the trial of automated tax returns between 2015 and 2016. The E-tax software would be eventually replaced by a web portal via myGov.au to deal with tax related issues.
While some tax agents would lose low-margin business from taxpayers with simple returns, most accountants realised there was more future in offering targeted advice to taxpayers with complex affairs, said Michael Croker, head of tax policy from the Institute of Chartered Accountants Australia in the Financial Review.
Under the automated tax return plan, wage and salary earners received a ‘thank you’ receipt from the ATO, which showed how their tax dollars were spent on welfare, health, education and defence.
Taxpayers spent on average $371 each in outsourcing tax refund preparations, according to the latest Tax Statistics released. The ‘tick and flick’ scheme was the Treasury’s plan to reduce red tape but it would be difficult for individuals with work-related deductions. Individuals claimed more than $19 billion in work expenses last year.