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The ATO’s continually growing powers, scrutiny of taxpayers, and access to taxpayers’ personal information have become an invasion of privacy.
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We need to cap the ATO’s access to personal data
26 July 2024
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12 minute read
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The ATO's data-matching program is primarily designed to help the agency unmask taxpayers trying to ‘cheat’ the system by overclaiming in their tax return submissions, or those purposely delaying or ignoring payments altogether.
This focus on compliance has pushed the ATO to go above and beyond what the average Australian taxpayer would likely expect the lengths any service provider would take to ensure they pay on time. This includes collecting data from cryptocurrency designated service providers for up to one million individuals, accessing Service Australia records of 180,000 individuals to crackdown on false Medicare levy exemption claims, and accessing data from the likes of Amazon, eBay, Uber, Airbnb, insurance companies and investment providers.
The data being accessed by the ATO includes but is not limited to names, addresses, ABNs, dates of birth, contact numbers, email addresses, social media accounts, IP addresses, transaction data, loan information, payment methods, shipping addresses, government services entitlement details, trading histories, wallet addresses, financial transactions, vehicle registrations, visa records, tenant data and Australian Electoral Commission information.
And that’s far from a complete list. This extensive data collection goes far beyond what is typically expected, highlighting the ATO's broad reach into individuals' personal lives and financial activities.
The ATO’s capacity to protect our personal data deserves to be questioned
The fact that the government is able to access and leverage this personal information gathered from both the private and public sectors is concerning. Furthermore, consider the rapidly rising rate and complexity of cyber security threats to the Australian government and business ecosystem as a whole, alongside the government’s capacity to accurately manage the extensive data it already has at hand.
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The ATO alone is managing over four million cyber attacks every month, highlighting the extensive lengths cyber criminals will go for the chance at accessing even one piece of personal information that millions of Australians are sharing with the ATO throughout the year.
Unfortunately, the ATO has proven its own systems are not flawless in their operations or accuracy. Most recently, the ATO's automated systems were found to be using faulty software that led to over a 1,000 wrong transactions. Many in the industry and those affected by the errors are now drawing comparisons to the robo-debt scheme, dubbing this debacle as ‘Robotax’.
Under the Privacy Act 1988, private entities must provide clear opt-out options and full disclosure for data collection, ensuring transparency and control. However, the ATO's practices often fall short of these standards. Given the ATO's recent funding of $169.9 million to expand its Personal Income Tax Compliance Program, it is imperative to question why taxpayer money is being used to allow the ATO to potentially overstep privacy laws that apply to everyone else.
Looking ahead, the risk of a data breach on such a scale could be devastating, compromising individual privacy and the integrity of the entire tax system. Taxpayers and the tax ecosystem need to ask the government and the ATO where they will draw the line in their access to personal information. If there is no limit, why?
It’s time to put some trust back into taxpayers
As well as being an unnecessary invasion of privacy, the ATO’s growing access to private information with the end-goal of compliance is a reflection of an unfair assumption that the average taxpayer is proactively lying in their tax returns.
What if, rather than assuming bad intent, the ATO invested in educational materials to help everyday Australians better understand their obligations and how to accurately submit their documentation? What if, rather than taxes not being included in even tertiary accounting studies, we invested in teaching the basics of our complex tax system to high school students so they had the knowledge to correctly claim and pay their tax returns on time?
Every year, the ATO reiterates its commitment to moving towards a “digital-first” tax system, and every year the government announces further millions of dollars invested into compliance measures aiming to catch supposedly dodgy taxpayers. As we start this fresh financial year, the government has an opportunity to finally partner with leaders in digital-first finance and tax solutions to overhaul how taxes are submitted, analysed, and collected. It’s time to take that opportunity and start investing in a fair tax ecosystem.
By Nicole Kelly, Founder at TaxTank
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