Taxpayers are paying significantly more to comply with state taxes administered by the Office of State Revenue in Western Australia compared to just five years ago, according to a survey by the Institute of Chartered Accountants.
Taxpayers are paying significantly more to comply with state taxes administered by the Office of State Revenue in Western Australia compared to just five years ago, according to a survey by the Institute of Chartered Accountants.
The report found that regulation was more costly because the laws are not transparent, do not encourage minimal compliance costs, lack relevance and fairness. Furthermore State Reveune did not have adequate knowledge of the state's industries to administer the tax system in a fair and equitable manner and audits are not always conducted on a timely basis.
These were the findings expressed in an Institute of Chartered Accountants survey of 82 Western Australian business people in key financial roles such as CFO and Financial Director.
The main findings from the survey revolved around three common themes - compliance costs, customer service and businesses' views of the tax system:
Compliance Costs
- 79% of respondents have higher compliance costs compared to five years ago; and
- 61% of taxpayers interviewed don't believe state taxation laws encouraged minimal compliance
costs.
Customer Service
- 88% of respondents were not aware of the OSR's Customer Service Charter, despite it being issued in July 2004;
- 41% of participants don't believe that OSR staff have the necessary industry knowledge, resulting in ineffective assessments and higher compliance costs for taxpayers;
- 36% of respondents disagreed that the OSR's audit activities were conducted in a timely manner; and
- 30% of participants disagreed that the OSR adopts a professional approach.
Business Views
- 60% agreed that state taxation laws are not relevant to the commercial environment;
- 54% don't believe the state taxation laws are fair;
- 39% don't believe that state taxation laws are transparent; and
- 39% don't believe that state taxation laws are understandable.
The findings indicate a need for substantial change within the State Reveune and our state tax laws according to Con Abbott, WA's General Manager for The Institute of Chartered Accountants.
"We have undertaken this survey with a view to evaluating the State Reveune's conduct in the fields of audit and assessment and are concerned by the findings. It has revealed issues around the manner in which taxpayers are treated, the industry knowledge exhibited by the State Reveune and the overall equity and fairness of the tax system," Mr Abbott said.
To address some of these concerns the Institute recommends that an independent review be undertaken of the State Reveune resources to ensure that they are adequate and that State Reveune officers have the appropriate skills.
The Institute recommends the State Reveune develop specialist units, aligned to major industry segments, within its organisational structure along with a 'relationship management' approach towards its major customers. The Institute also recommends the education and training of State Reveune staff be reviewed to address taxpayer concerns regarding professionalism and industry knowledge.
There are strongly held concerns within business regarding the equity and clarity of the state's tax laws. As such, the Institute recommends an annual survey of taxpayers' perceptions of state tax laws, with the results being reported in the Department of Treasury & Finance's annual report and tabled in Parliament by the Treasurer," Mr Abbott said.
The WA Government is to be congratulated for implementing an independent review of state taxation and the Institute is hopeful that some of our concerns about the fairness and equity of state tax laws will be addressed by the review because they are part of its terms of reference. "We look forward to the outcomes of the review in 2006", Mr Abbott said.
Consistent with the findings of the survey, as a key reform initiative for state taxes, the Institute also advocates that the states and territories undertake a review, with the primary aim of reforming and standardising administration across taxes and jurisdictions.
