I want to reflect on one of the most important of the ongoing consultation forums with the ATO, the National Tax Liaison Group (NTLG). The importance of the NTLG cannot be underestimated. The ATO is represented at the very highest level by the Commissioner, Second Commissioners, Chief Tax Counsel and other very senior officers as called on from time to time to explain issues about the administration of the tax system. The Tax Institute is represented by the President, Vice-President and Senior Tax Counsel. That representation demonstrates our commitment.
The NTLG is focused on those issues which impact on higher-level tax administration, while more detailed consideration of the intricacies of the law and its administration are left to the NTLG sub-groups. Those sub-groups are peopled by members with specialised knowledge. Some examples are sub-groups for international tax, consolidations and trusts (of which I am inordinately fond, having wrestled with intractable trust taxation issues for some six years). There are also working groups brought into existence to deal with new legislation or particular issues that require special expertise. These working groups are flexible and usually have a limited life but can achieve a great deal in a short time.
An example of the high-level discussions taking place in the NTLG is that which occurred at the most recent meeting on 20 September 2012. The professional bodies asked about how the ATO would maintain its service levels in critical areas in view of the need to meet the government’s efficiency dividend. Frances Cawthra, the Chief Financial Officer, explained the measures being taken by the ATO to meet its obligation, and the Commissioner discussed how scarce resources would be nurtured. This is a side of the ATO’s administration that professional practitioners rarely consider, but it is important that we recognise the reality of the pressures under which the ATO operates and assist by communicating to the Commissioner our understanding about what is important and those things that are less important.
Another example of the good work that can be done in the NTLG coming out of the meeting concerned the recently introduced director penalty notice rules, particularly as they impact on associates of directors. An array of questions was posed by The Tax Institute and it became apparent in the response that a lot of work was being done by the ATO but a great deal more needed to be done. The Commissioner quickly recognised this and decided that a working party approach was appropriate to bring external experience into the decision-making process.
Treasury is also represented at these meetings and we appreciate the candour with which the ongoing logjam of legislation is discussed. It is very important that The Tax Institute appropriately keeps pressure on government through Treasury to deal with the backlog of unaddressed issues. Our tax system can only maintain its health if legislation is brought into existence. The system will start to fail if taxpayers have to guess at what their liabilities might be.
The balance of the meeting roved over the ATO’s dispute management plan, the risk differentiation project, the trust resolution project, and lodgments. It is all good stuff and, as I have said at the outset, critical to keeping the tax system alive and well on a cooperative basis.
Ken Schurgott is President of the National Council at The Tax Institute.
The Tax Institute is Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.