Important role for new tax watchdog
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Tuesday, 4 June, 2002 - 22:00
A NEW tax watchdog is expected to be in place by the end of the year.
Minister for Revenue Senator Helen Coonan has released a consultation paper detailing the role of the Inspector General of Taxation.
Senator Coonan said taxpayers had legitimate concerns about their dealings with the ATO.
“Taxpayers have continually raised concerns about matters such as delays in processing, the provision of inconsistent advice and the lack of certainty surrounding their taxation obligations,” she said.
“I believe there is scope to improve the responsiveness of the tax administration system to the needs of taxpayers, and the Inspector General of Taxation will have an important part to play in achieving a fairer system.”
The inspector general will be an independent adviser who will identify systemic problems in the tax administration system. He or she will be given broad investigative powers to examine the operation of the current tax administration system.
The powers of this new watchdog could be activated by requests from Treasury ministers, the Commissioner of Taxation, parliamentary committees, representations from taxpayers and taxpayer groups or from the Commonwealth Ombuds-man. In addition, the inspector general can also act autonomously.
Issues already identified for examination include the operation of the self-assessment system, the appropriateness of ATO audit guidelines and the effectiveness
of the current rulings system.
Priority will be given to issues that will have a positive impact on the largest group of taxpayers.
According to Senator Coonan, the inspector general would not replace the ombudsman. He or she would be an advocate for taxpayers, with a focus on systemic issues, while individual complaints would continue to be dealt with by the ombudsman.
Determining what is systemic may be a difficult task. Associate Director (Education) at ATAX, Michael Walpole, says the WA’s schemes cases were a good example of this.
“The first Budplan matter applied to an individual, but then at what point did it become a ‘systemic matter’,” he said.
“For the system to work, the ombudsman will need access to the inspector general, and to have good avenues for communication to identify which matters would be of wider concern.”
If the line dividing the responsibilities of the inspector general and ombudsman is unclear, there is a potential for problems.
The US introduced an inspector general to provide independent oversight of tax administration in January 1999.
While a $2 million budget has reportedly been set aside for the Australian inspector general, the office of the US inspector general is considerably larger, with nearly 1,000 staff in 70 field offices throughout the country.
The Board of Taxation has called for comments on the Government’s consultation paper by June 25. It will then report to Senator Coonan by July 19, and the necessary legislation should be introduced in the spring sitting of parliament.
The introduction of this new watchdog was an election commitment of the Government, and it has committed to having someone in the job by the end of this year.
What type of person would take on this role? The consultation paper calls for someone with excellent technical knowledge of the taxation system and of administrative practices more generally.
They would need to have a very good first hand appreciation of business practices and government processes, and be able to maintain an independent view of the tax administration system.
The appointment would be for a fixed term, with the role established as a statutory authority, reporting annually to parliament.
Former Treasury and ATO staff have been tipped as possible candidates.
Rodney Fisher, a senior lecturer from ATAX at the University of New South Wales, suggests the inspector general would need to be someone who had seen both sides of the fence – the ATO side to understand the difficulties associated with implementing in terms of rapid change, and the practitioner side to understand the difficulties they face.
Minister for Revenue Senator Helen Coonan has released a consultation paper detailing the role of the Inspector General of Taxation.
Senator Coonan said taxpayers had legitimate concerns about their dealings with the ATO.
“Taxpayers have continually raised concerns about matters such as delays in processing, the provision of inconsistent advice and the lack of certainty surrounding their taxation obligations,” she said.
“I believe there is scope to improve the responsiveness of the tax administration system to the needs of taxpayers, and the Inspector General of Taxation will have an important part to play in achieving a fairer system.”
The inspector general will be an independent adviser who will identify systemic problems in the tax administration system. He or she will be given broad investigative powers to examine the operation of the current tax administration system.
The powers of this new watchdog could be activated by requests from Treasury ministers, the Commissioner of Taxation, parliamentary committees, representations from taxpayers and taxpayer groups or from the Commonwealth Ombuds-man. In addition, the inspector general can also act autonomously.
Issues already identified for examination include the operation of the self-assessment system, the appropriateness of ATO audit guidelines and the effectiveness
of the current rulings system.
Priority will be given to issues that will have a positive impact on the largest group of taxpayers.
According to Senator Coonan, the inspector general would not replace the ombudsman. He or she would be an advocate for taxpayers, with a focus on systemic issues, while individual complaints would continue to be dealt with by the ombudsman.
Determining what is systemic may be a difficult task. Associate Director (Education) at ATAX, Michael Walpole, says the WA’s schemes cases were a good example of this.
“The first Budplan matter applied to an individual, but then at what point did it become a ‘systemic matter’,” he said.
“For the system to work, the ombudsman will need access to the inspector general, and to have good avenues for communication to identify which matters would be of wider concern.”
If the line dividing the responsibilities of the inspector general and ombudsman is unclear, there is a potential for problems.
The US introduced an inspector general to provide independent oversight of tax administration in January 1999.
While a $2 million budget has reportedly been set aside for the Australian inspector general, the office of the US inspector general is considerably larger, with nearly 1,000 staff in 70 field offices throughout the country.
The Board of Taxation has called for comments on the Government’s consultation paper by June 25. It will then report to Senator Coonan by July 19, and the necessary legislation should be introduced in the spring sitting of parliament.
The introduction of this new watchdog was an election commitment of the Government, and it has committed to having someone in the job by the end of this year.
What type of person would take on this role? The consultation paper calls for someone with excellent technical knowledge of the taxation system and of administrative practices more generally.
They would need to have a very good first hand appreciation of business practices and government processes, and be able to maintain an independent view of the tax administration system.
The appointment would be for a fixed term, with the role established as a statutory authority, reporting annually to parliament.
Former Treasury and ATO staff have been tipped as possible candidates.
Rodney Fisher, a senior lecturer from ATAX at the University of New South Wales, suggests the inspector general would need to be someone who had seen both sides of the fence – the ATO side to understand the difficulties associated with implementing in terms of rapid change, and the practitioner side to understand the difficulties they face.