The Federal Budget for 2014-15 is heavily focused
on cutting government expenditure, and leaves us waiting for the tax reform
white paper process to achieve any real progress on revenue. The temporary
Budget Repair Levy is just that — a temporary fix which attempts to address the
government’s immediate budgetary concern without considering the design of the
tax system as a whole.
process will be the first real test for our new technical committee structure.
The renewed structure will have more of a focus on broad tax reform, and
encourages committee members to be proactive in raising and addressing
fundamental issues in our tax system. While we will have a committee dedicated
to this particular focus, I would encourage all committee members and indeed
the wider membership to contribute with suggestions for broad tax reform.
measure that has received little attention in the press is the announcement
that the ATO must shed 2,100 workers by 1 October, on top of the 900 job losses
that were already underway. This is a dramatic cutback to achieve within a very
limited timeframe. There will also be cuts to the ATO’s IT budget. It seems odd
that a government so desperate to raise more revenue would reduce the capacity
of the one department responsible for collecting revenue.
Although the government and the ATO would never
admit it, there is a danger that these cutbacks will reduce the ATO’s ability
to respond effectively to enquiries by taxpayers and their advisers. The Tax
Institute will do what it can to encourage the ATO to minimise the disruptions
to its frontline services.
not to adopt the Commission of Audit report recommendation that the ATO
watchdog, the Office of the Inspector General of Taxation (IGT), be absorbed
into the Office of the Commonwealth Ombudsman. In the Budget, the government
has taken the opposite approach, moving the tax complaints function from the
Office of the Ombudsman to the IGT.
support the government’s decision to retain the IGT as an independent agency.
The IGT plays an extremely important role in holding the ATO to account in
improving the administration of the tax laws for the benefit of all taxpayers.
The cutbacks to the ATO’s budget only serve to increase the significance of the
IGT’s oversight in monitoring the quality of ATO services.
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.