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Prompted by Australia’s escalating tax debt, the Inspector-General of Taxation has recommended changes to the tax office’s debt collection policies.
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IGT calls for change at ATO
15 July 2015
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In a report released yesterday the Inspector-General of Taxation (IGT), Ali Noroozi, said he is largely pleased with the ATO’s progress in the area, but has made several recommendations he says will improve tax office processes.
“I am pleased that the ATO has acknowledged challenges with its past debt collection strategies and is changing its approach to one based on behavioural analysis – an approach which I have advocated in previous reviews,” Mr Noroozi said.
“In the meantime, I have also recommended interim measures to improve preventative strategies and minimise the need to take firmer actions later.”
Mr Nozoori made specific mention of the ATO’s use of garnishee notices, proposing structural changes to the way these are handled.
Currently, Mr Nozoori said, low-level debt officers make debt recovery decisions without sufficient knowledge of the facts and the law, knowledge he said is held instead by audit and legal officers.
“I have recommended that the ATO consider merging its debt and audit areas, as well as working closer with their legal officers in order to improve coordination and the taxpayer experience.”
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Whilst the ATO has disagreed with the above recommendation, it has said will consider the appropriate organisational structure through its reinvention program.
H&R Block has welcomed the IGT’s report but has criticised the tax office’s response.
“The most worrying aspect of this report is the disappointingly ambiguous response from the ATO itself,” Mrak Chapman, the accounting network’s director of communications said.
“While they have formally accepted 16 of the Inspector-General’s recommendations, their detailed responses to those recommendations appear to consist of vague motherhood statements or remarks which effectively disagree with the recommendations.”
“The Inspector-General himself has picked up on this and criticised it, and he’s right to do so.”
Mr Chapman called on the ATO to implement all the IGT’s recommendations.
“The Inspector-General performs a vital role in safeguarding taxpayer’s rights within the system and the ATO should make specific commitments to implementing his recommendations within an agreed timeframe,” he said.
“No doubt he will be monitoring the ATO’s implementation of his recommendations and hopefully he will return to the subject soon to ensure that real action has been taken to improve matters.”
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